Citadel CEO Ken Griffin made a bet on Deliveroo stock in February. Credit: REUTERS/Mike Blake/File Photo
Hedging The fund, founded by American billionaire investor Ken Griffin, took a multi-million-pound short position in food delivery company Deliveroo.
Citadel Advisors placed a bet on Deliveroo's shares in February, which have since increased in size, with about 1.4% of the company's shares shorted.
Mr. Griffin, 54-year-old fund employee. The one-year-old CEO, worth about $35bn (£28bn), founded Citadel in 1990. The investment firm currently manages over $60 billion in assets.
Deliveroo shares hit a 12-month high. this week, settling at around £1.10 after rising 3.4% in trading on Friday.
While consumers have reduced the number of take-out meals ordered, rising food prices have increased income of companies involved in delivery.
Deliveroo receives a portion of the orders placed through the smartphone app, which are then delivered by couriers to visitors.
The stock of the food delivery company has so far defied the cost-of-living crisis, despite Deliveroo reporting last week about a 9% decrease in the number of takeaway orders in the first three months of the year.
The group said revenue rose 7% to £512m in the first quarter of 2023, but the average value of its orders rose 12% due to higher food inflation.
Food prices soar
On Thursday, Deliveroo's chief executive, Will Shue, said the company has delivered «strong results, especially in the context of inflationary pressures and the ongoing cost-of-living crisis.»
< p>Analysts at Jefferies stated that the results were «robust compared to expectations» and «validation» of Deliveroo's «strategy and execution».
The delivery company is now valued at around £1.9bn, so Citadel's short position is worth £27m.
Short sellers borrow shares of a company and then sell them, betting that the price of the shares will fall so they can buy them back at a profit.
Mr. Hedge Fund Business Griffin earned $28. according to Reuters. The electronic trading company he owns, Citadel Securities, has raised $7.5 billion.
The only other fund that has taken a significant short position in Deliveroo is Marshall Wace, according to regulatory filings.
A hedge fund owned by Crispin Odie also went short against Deliveroo in 2021, shortly after it went public, although the disclosure threshold is below 0.5% of the company's shares.
Deliveroo's stock price has plummeted since a bad public offering two years ago. However, its shares have risen this year and are up 24% since January.
A representative for Deliveroo declined to comment.
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