Asos share price under pressure amid short-seller attack

Written by: Tsveta van Son
September 16, 2019

Asos’ (LON:ASC) share price has fallen into the red in today’s session amid news that the online retailer has been targeted by short-sellers. The move follows the AIM-listed company’s quarterly results statement last month when Asos cautioned on profits, citing lower sales, higher warehouses transition costs, along with costs associated with organisational restructuring.

As of 14:35 BST, Asos’ share price had given up 4.53 percent to 2,175.00p. The group’s shares have given up more than 64 percent of their value over the past year.

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Short-sellers attack

Proactive Investors reported today that according to website ShortTracker, since the start of the current month, three investment firms, namely AQR Capital Management, Gladstone Capital Management and Marshall Wace have all increased their short positions against the firm. Gladstone has seen the biggest increase, adding 0.13 percent of the shares to its short position, which now stands at 1.24 percent.

The news marks another blow for the online retailer which last month cautioned on profits, saying that it expects to deliver profits in the range of £30 million and £35 million. In April, the company reported that it had seen ‘disappointing’ performance in the first half of its financial year, posting an 87-percent slump in reported profit before tax.

Analysts on Asos

In analyst news, Jefferies delivered a further blow to the company, trimming its stance on the stock to ‘underperform,’ and lowering its target on Asos’ share price from 3,500p to 2,000p. According to MarketBeat, the company currently has a consensus ‘hold’ rating and an average valuation of 3,209.19p.

The 24 analysts offering 12-month targets on the Asos share price for the Financial Times have a median target of 3,106.50p, with a high estimate of 4,200.00p and a low estimate of 1,470.00p. As of August 10, the consensus forecast amongst 30 polled investment analysts covering the AIM-listed retailer investors to hold their position in the company.