Tuesday, November 30

Bassists give IAG a breather

Bassists found in IAG to one of their favorite victims in 2021. Since the beginning of the year, they did not hesitate to attack the airline holding company, despite the fact that during the first quarter the titles of the parent company of British Airways e Iberia They were revalued by 40 percent.

The hedge funds resisted and time has ended by agreeing with some juicy profits and now they are giving the company a break.

IAG shares are down 25 percent from annual highs in March of 2.53 euros, at which point it kicked in. D. E. Shaw.

This hedge fund, led by the computer engineer David E. Shaw and that the magazine Fortune came to define as “one of the most intriguing forces of Wall Street”, He handed over the spoon and sold off his shorts at the start of November. But it came to accumulate a bearish position of up to 0.57 percent of the capital.

Citadel forcefully reduced his attack

Since then, the value falls by about 4 percent, so Citadel, the other hedge fund that attacked the stock in two ways continued to make cash, but also began to collect benefits.

Citadel Advisor reached 0.88 percent against the company, but now it has disappeared from the records of the National Securities Market Commission, as the supervisor only forces bears to declare positions above 0.5 percent .

Despite the departure, it remains from Citadel Europe with an open position since February that reached its maximum at the beginning of this month when controlling from the short side 1.27 percent of the currency.

The bears got their analysis right on IAG

From then on, Citadel Europe accumulates three short cuts, down to the current 0.99 percent, a position that has a charge against IAG shares of 53.53 million euros. IAG shares are up 5 percent year-to-date but are still trading below 2 euros a share.

Bears break out of value, the theory goes, when they believe that declines cannot go any further, but the outlook for IAG does not look favorable at the moment. In fact, they coincide with the reasons why these hedges funds entered the stock months ago.

While investors discounted that the company could save the summer campaign, the bears bet otherwise, a situation that ended up being imposed and that is being repeated now, as travel restrictions are once again protagonists in the Old Continent.

The holding company’s problems go beyond the fundamentals

It has done little for now to revitalize the actions of IAG that USA, upon presentation of the vaccination passport, they have lifted the restrictions for flights from Europe, with which the company can now operate again in one of its key markets.

What’s more, other countries that allow travelers again and that are relaxing restrictions also show concern by the recrudescence of infections. A good example of this is Israel that, despite being one of the countries with the highest vaccination rates and among the first to immunize the population, is strongly suffering a short wave of the pandemic.

Thus, IAG’s problems go beyond the fundamentals of the company, the rate of use of cash, debt or passenger transport capacity. Regarding the results, it is estimated that it will close 2021 with losses of 3,000 million euros.

The latest results offered to the market, relative to the first nine months of the year, left losses of 2,622 million euros, in line with what was expected by the consensus and 50 percent lower than those of a year ago.


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