Millennium Management, the US hedge fund founded by billionaire trader Israel “Izzy” Englander, is shorting more than €200 million worth of shares in two of Ireland’s biggest companies.
Mr Englander’s firm has a short bet against 1.14 per cent of the shares in Flutter, which is worth about €160 million at Flutter’s current share price, according to share data compiled by the Central Bank.
At the same time it has a short bet against 0.50 per cent of Bank of Ireland’s shares, which is worth about €52 million at the bank’s current share price.
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Both companies’ share prices have been rising in recent months. Flutter is currently trading at just under €182, having risen over the last year from a low of some €140 in November. Bank of Ireland’s share price in the last month has risen from just over €9 to its current price of just under €10.30.
A short trade is a risky bet in which a trader borrows shares from a broker and sells them on the open market. The trader waits for the price to fall sufficiently so they can buy new shares, return them to the broker and pocket the difference in profit. It is predicated on the trader’s conviction that the share price will drop at some point in the future, though it is not always possible to glean what the trader’s full strategy might be.
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Given the level of risk inherent in such bets – the losses, if the trade goes wrong, are potentially limitless – regulatory disclosure rules around the size of the trades are stronger than those around normal equity investments.
Mr Englander’s firm has, over the last year, taken out sizeable bets against a number of other Irish publicly listed companies, including CRH, Origin Enterprises, Smurfit Kappa and Kingspan.
Millennium, which was founded by Mr Englander and Ronald Shear in 1989, has about $50 billion in capital under management.
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