It’s been a bright start to the new week as far as stocks are concerned with benchmarks in London and across Europe moving higher. The FTSE 100 is higher by around 40 points and trades back at the 7600 level. The pound is little changed on the day with sterling remaining not far from its lowest level in more than a year and trading at $1.2740 last.
Mulberry (LON:MUL) shares plunge after House of Fraser warning
After cautioning of the adverse impact that the collapse of House of Fraser would have on the firm, shares in Mulberry cratered and fell by almost 30% this morning. The luxury handbag maker has said the collapse could cost it as much as £3m with Mulberry operating out 21 stores in House of Fraser and employing 88 staff. The stock has recovered a little since the open, but remains lower by almost 20% with not just the expected House of Fraser related cost but also some pretty negative forward guidance clearly spooking investors. The latest developments come after a challenging 2018 for the firm with the share price already heavily under water year-to-date before today’s swoon. The problems stem from a drop of demand in the UK, which accounts for more than 70% of total revenue, and is arguably an even greater longer term concern.
Tesla short sellers get some joy
Since Tesla (NASDAQ:TSLA) boss Elon Musk took to social media to announce that funding had been “secured” to take the firm private, there has been some wild swings in the stock, with the initial spike higher having faded and the share price ended Friday well below where it was before the infamous tweet.
Tesla is one of the most heavily shorted stocks in the world with more than a quarter of the firm’s entire float believed to be in the possession of short-sellers who are essentially betting that the price will fall, and some believe that Musk’s tweet was a ploy to force them to cover and buy back the stock at higher prices. If that was the strategy then it appears to have not worked well with less than 4% of short positions being closed since, and with the market now 19% below where it was beforehand, the mark-to-market value of short positions has gained by $1.2B in the interim.