Market Report: Short-sellers of Ocado cashed in on basket case

Ocado has lost almost a third of its stock market value since November

Short-sellers of Ocado cashed in yesterday as shares in the online supermarket were a basket case on the FTSE 250.

Ocado, off 18.2p yesterday at 276.8p, has lost almost a third of its stock market value since November, with investors fearing the arrival of Amazon Fresh in the UK and still waiting for its first overseas deal.

Investors betting on include BlackRock, the world’s largest asset management firm, and JPMorgan Asset Management.

Information from short-selling data specialist FIS Astec Analytics suggests some investors began covering their shorts last Thursday as vague rumours circulated about a takeover.

The FTSE 100 continued its dreadful start to the year by falling another 40.61 points to 5,871.83 after another slump in Chinese stocks and in oil prices. Brent was down $1.60 to $31.95 a barrel in the afternoon.

Sports Direct hit a three‑year low after a second heavy fall in a row. Mike Ashley’s sporting goods retailer dived 30.3p to 403p as a wave of broker downgrades arrived after Friday’s shock profit warning.

Cantor Fitzgerald slashed its 700p target price to 480p – hardly a vote of confidence that the battered stock would bounce back – as Liberum removed its buy rating and swapped its 810p target price for 470p.

BAE Systems, 7p higher at 526.5p, enjoyed its second major broker upgrade of 2016 when JPMorgan lifted its recommendation to overweight, suggesting the geopolitical tensions will play into the hands of the aerospace and defence giant.

Home Retail Group gained 6.8p to 144.7p on hopes Sainsbury’s will have to raise its £1.1bn bid by as much as £500m to win over the Argos owner’s backers.

Richard Buxton at Old Mutual Global Investors, which owns close to 6 per cent of the company after increasing its stake last week, revealed he would only accept a bid of 200p or more, worth around £1.6bn.

Elsewhere, reports that American bidders are eyeing up a £1.2bn bid for Laird sparked a 31.9p rise to 360.9p from the Apple supplier.