ExodusPoint has disclosed its first short position in the UK, betting that shares in the country’s former-government controlled postal and courier service, Royal Mail Group Ltd., will fall.
The hedge fund first disclosed its short position on April 10 when it broached the disclosure threshold of 0.5% of outstanding shares mandated by the European Union. ExodusPoint increased the position to a peak of 0.61% of outstanding shares the following week, before reducing it back below the threshold today, according to public filings.
Shares in the Royal Mail have fallen sharply since it was sold by the British government via an initial public offering in 2013. The stock initially rose but then gradually fell until the end of 2017. There was a brief period of resurgence, at the beginning of 2018, as investor confidence grew over the firms parcel business growth. However, the last year has seen the share price tumble reaching an all-time low of 234 pence on March 26.
Falling pre-tax profits and ‘business uncertainty’ surrounding Brexit have contributed to the demise. The company is due to announce its full year earnings on May 22.
Other US managers betting against the company include Alliance Bernstein, BlackRock, Millennium Management and Paloma Partners. Outspoken Brexiteer and notorious UK-based short-seller Crispin Odey also has a bearish bet on the firm.
ExodusPoint recently revealed its first foray into shorting European stocks in a bet against French electrical equipment distributor, Rexel.
Michael Gelband’s firm is said to have gained 0.6% in 2018 and 1.7% this year. It recently bolstered its legal and compliance team and registered to operate in Singapore. The multistrategy fund, which launched in 2018, now employs roughly 200 people, a quarter of which are based in its London office.
ExodusPoint and Royal Mail declined to comment.
ExodusPoint seeks to profit from declining Royal Mail shares on Absolute Return.