Citadel hedge fund resumes its bearish bet against IAG three months later

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Citadel resumes its bearish bet against IAG three months later. The hedge fund that in April reduced its short position on the airline group the rearma now with 0.51% of its share capital. A return that coincides with the relief of travel restrictions in the United Kingdom but with the increase in infections due to the Delta variant of Covid-19.

The short position now declared by Citadel Europe equals an investment of 46.62 million euros based on the current IAG listing on the Spanish stock market. However, since reaching this position on July 16, as stated in its statement to the National Securities Market Commission (CNMV), the Spanish-British group accumulates a capitalization cut of 5%.

The hedge fund led by the American Kenneth C. Griffin entered IAG short in February, almost a year after the outbreak of the coronavirus crisis in Europe. By taking 0.57% of the capital at that time, he became the first relevant bear to bet against Iberia’s parent company in its more than a decade of stock market history.

Doubts return

Throughout this period, it increased its weight to 0.8% of the capital. A level that is now very far from his current siege, which he also exercises alone. This is due to the fact that DE Shaw & Co’s also bearish remain below the level of 0.5% of capital indicated by the supervisor since last May.

The doubts about the solvency and agility of the economic recovery that has introduced the agile spread of the Delta variant of the coronavirus, especially with regard to the return to normality of the tourism sector, they continue beating the price of the Spanish-British group. Null has been the effect of the lifting of restrictions in the United Kingdom on the airline’s graph.

In this scenario, Citadel repeat with a bearish reversal greater than 0.5% of IAG’s capital. A circumstance that until its irruption five months ago it had not suffered since its debut as a listed group, in January 2011. The company had remained 10 years free from the siege of relevant shorts, but Covid-19 broke the streak.

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