A short position of 0.57% emerges, the largest in the airline’s history.
For the first time in its long history, the airline IAG suffers a significant short or bearish position in the Spanish stock market. The all-powerful hedge fund Citadel Europe LLP has taken a 0.57% stake in IAG, which means it is playing 51 million euros against the share price.
The attack comes after IAG’s sharp rebound last week. The share jumped last Friday to 1.80 euros. This is the highest level since 18 January and allows the airline to get out of the red at the start of 2020.
The IAG share has rebounded 20% from the lowest intraday levels of the year, when it bottomed at 1.50 euros per share. It is now up 0.5% for 2020.
With its move, Citadel becomes the first hedge fund with a significant stake of more than 0.5% in the stock. The Chicago-based hedge fund headed by Kenneth C. Griffin thus extends its bearish radius of action in the Spanish market. It also has significant short positions in Cellnex and Banco de Sabadell.
Citadel is an old acquaintance in the capital of IAG, where it has had a significant presence through other investment vehicles. Since 2019, Citadel Multi-Strategy Equities Master Fund has been a significant shareholder of the group, with a stake that in April last year exceeded 3% of the capital.
At that time, its bet was very different. It entered IAG through derivatives after the big collapse caused by the Covid-19 breakthrough in March. The gamble worked out perfectly, as Citadel amassed huge capital gains of 50% with the subsequent rebound in the share price.
Now, the reeds have turned into spears and the hedge, one of those who participated in the rescue of Melvin Capital after the heavy losses caused by GameStop’s free fall, has become the main enemy of the airline’s shares.