£20m bet on Boohoo’s shares falling

A HEDGE fund has launched an attack on shares in Boohoo – the day after the fast fashion giant was accused of using sweatshop factories in Leicester.

P Squared Asset Management placed bets worth more than £20 million that the AIM-listed firm’s shares would fall. It was the first time a short position has been disclosed in Boohoo since Covid-19 struck the UK.

Short sellers use contracts to sell stock and buy i t back when the price f all s, making a profit on the difference in price. Swiss-based PSquared emerged with a 0.55 per cent short position on Monday.

Boohoo denies any wrongdoing. But the value of the firm has since dropped by £1.3 billion, meaning PSquared will already be sitting on a profit. On Friday, Standard Life Aberdeen sold its Boohoo shares, citing an ‘inadequate’ response to the allegations.

PSquared took a short position in NMC Health last year as it battled accusations of fraud. The company later collapsed.