Rightmove and Zoopla are among property-related firms which are being “shorted” by hedge funds that are gambling on a falling housing market.
Foxtons, Savills and house builder Barratts are also being targeted.
Shorting is the practice of selling shares you do not own but which are borrowed and subsequently purchased for a lower price – leaving the ‘shorter’ with the profit.
Hedge funds are required to declare short positions over 0.5%.
GLG Partners revealed a 0.56% short on Zoopla on October 2, and a 0.51% short on Rightmove on October 6.
Zoopla shares are down almost 15% since September 1 and Rightmove’s share price has fallen 21.5% since then.
Pine River Capital Management also has a short position on Rightmove, although it decreased it very slightly, by 0.04%, in late September.
AKO Capital increased its short position on Foxtons by 0.25 to 1.17% on October 7, while JP Morgan Asset Management opened a 0.84% short position on Foxtons on October 1.
Foxtons’ share price has fallen 14% since September 1.
Brookfield Investment Management has held a 0.59% short position on Savills since early August.
Recent house price indices have shown a slow down in house price rises, with falls in prime central London. Last week, Connells’ surveying arm said that it had carried out fewer valuations last month than in September 2013, while e.surv, part of LSL, forecast fewer house purchase mortgage approvals last month than in September 2013.
In yesterday’s Sunday Times “Inside the City” column, Danny Fortson referred to the Halifax report which said that soaring house prices had peaked.
He went on: “Rightmove came out a couple of days later to pooh-pooh that theory. Britain’s biggest property website said prices were set to increase by 30% over the next five years.
“The prediction had more than a faint air of someone talking their own book, given that Rightmove makes it crust from estate agents listing properties.”
Comments (5)
This is a fascinating and amazing piece of journalism. Thanks Rosalind.
There is a storm brewing and the market which has been over valuing these companies with the "internet boom" mentality, knows this and starting to get cold feet as they hold no assets of any real value which will become more apparent when people start to look at the figures as we move back towards a recession?
Agents sell/rent property, not portals. Portals are no more than a listing/marketing device.
Portals are much more than just a marketing device these days my friend. Perhaps a bit of research required. Portals are also used for general market and area research by both buyers/sellers and agents among many other things.
Here's question for you. Two, actually. First – What do you think people did BEFORE portals? Second – What would people do if the internet simply stopped tomorrow? Clue – don't be surprised if the answers look pretty similar…