The stock market value of flooring group Victoria has fallen by more than 4% today as the extent of short-selling was revealed.
According to figures from S&P Global more than one in eight shares (12%) are on loan, used as proxy measure for short-selling, compared with less that 1% at the start of the year.
In the past seven months the group has seen its share price fall by 66.9%, wiping more than £900m off its value as the valuation dropped from £1.38bn, generating huge profits for short-selling investors who bet that the share price will fall.
The share price continues to fall despite the group continuing to buy its own shares – it bought another 25,000 at 403.5p a share this morning – after a critical report from an activist investor which questioned the transparency of a number of acquisitions and ‘the reliability of its auditor, Grant Thornton.’ The group’s advisor Buchanan Communications declined to comment on the report.
The share price dropped by more than 5% at one point earlier today, reaching 387p before recovering some ground to 391.5p at the time of writing.
When Geoff Wilding was appointed executive chairman on 3 October 2012, the group’s share price was 50p.
In the year to 2 April the group saw sales break the £1bn barrier for the first time, with an operating margin of 10.6%.
