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Short Seller Cashes In on Car Finance Scandal
5 Apr
Summary
- Short seller amassed millions betting against Close Brothers.
- Close Brothers faces significant payouts from car finance scandal.
- Analyst report estimated double the initial provision was needed.
A short seller has profited significantly by positioning against Close Brothers, a financial institution impacted by the UK's car finance scandal. Viceroy Research released a report suggesting Close Brothers' provision for compensation payouts needed to be more than double the initial £300 million estimate.
This analysis led to a substantial drop in Close Brothers' share price, from £4.15 to a low of £3.21. Market sources indicate the short seller has realized approximately £2.9 million in profit. The overall cost of the car finance compensation scheme is now estimated by regulators to be between £9 billion and £11 billion.
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