Hedgie makes big Ocado loss

Marion Dakers
ONLINE grocer Ocado’s recent growth has stung a US hedge fund, which has reportedly lost up to £40m by shorting Ocado stock after the firm’s rocky flotation in July.

Elinor Carter Brooks from New York-based Blue Ridge Capital is thought to have bet against the shares when they had already dropped to near all-time lows of 130p in October.

Its shares closed at 259.3p on Friday, valuing the firm at £1.4bn.

Ocado shares were shorted aggressively following its lower-than expected float last July, with around 4.5 per cent of the shares at one point available for borrowing.

Ocado declined to comment, while Blue Ridge could not be reached yesterday.

It was not all good news for Ocado yesterday, as partner Waitrose announced a £10m website revamp for its home delivery service.

Waitrose, which supplies most of Ocado’s products, said it hopes to launch its own web store in the second week of March.

Waitrose said its service will focus on “personal touches” such as letting customers select the ripeness of fruit.

The employee-owned supermarket plans to expand inside the M25 for the first time since signing a supply agreement with Ocado that barred such a move until last year.

Ocado insiders yesterday played down any rivalry between the online services. “Ocado couldn’t be growing much faster right now, and there is room in this market for everybody,” said one source.

Waitrose is also said to be in talks with potential partners about opening new franchised stores in South Africa, Australia and the Far East. It declined to comment on the potential clash with Ocado’s business.