Hedgies bet on fresh downturn in tech shares

Michael Bow
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HEDGE funds increased their bets against big name European technology stocks last month, after data showed a surge in the short selling of shares in the sector.

Data out this week shows 6.7 per cent of European technology shares – including big name brands like Nokia and Logitech – are currently out on loan to short sellers such as hedge funds, an increase of three per cent over the month.

Under short selling strategies, hedge funds make money if the firms do badly and their shares fall.

Leading the pack of companies hedgies think will do badly is German tech manufacturer Aixtron, which has 23.4 per cent of its shares out on loan, almost three quarters of the total amount allowed.

“It would be hard to borrow anymore,” Markit director Alex Brog, who conducted the research, said.

Mobile phone maker Nokia has also seen an 8.1 per cent rise in the number of shorts against it, rising to 18.8 per cent of its stocks out on loan, as investors bet against the success of its forthcoming Lumia 920 phone.

Swiss company Logitech, which makes keyboards and computer accessories, is also being heavily shorted after it posted a profit warning last month, sending its shares to a nine year low.