Hedge funds hit WPP

HEDGE funds have placed a £1bn bet against WPP.

Following the recent exit of boss Sir Martin Sorrell, more than 6pc of the advertising group’s stock is now on loan to short sellers who predict its share price will fall.

Those with short positions include Old Mutual Global Investors and Marshall Wace, which between them have 1.6pc of shares, figures show.

However, market information provider IHS Markit has revealed others are also piling in as the company grapples with a period of turmoil.

WPP shares hit lows in March and April not seen for five years.

Sorrell was battling allegations of misconduct, which he repeatedly denied, but eventually he resigned in April. His departure left the group on the hunt for a chief executive, with Mark Read and Andrew Scott taking over temporarily as joint chiefs.

Since then WPP has announced plans to slim down by selling minority stakes it has built up in a variety of companies over the years.

Shares had recovered since Sorrell’s departure but have fallen again by more than 10pc since last month, when its subsidiary Mindshare lost banking giant HSBC as a client. Yesterday they were down 1.3pc, or 16p, at 1204.5p.

IHS Markit said about 81m WPP shares are on loan to short sellers – worth about £1bn in total.