Shorting the market - the vultures target HMV

A few weeks back we focused on the problems facing UK retailer HMV. Weak sales and a difficult financial position have made the business a target for hedge funds who decide to short the stock anticipating a further fall in the company’s share price. This Guardian article looks at the stocks on the UK FTSE that lead the list of shares being targeted by the short-sellers.

Short selling is a strategy used by investors who expect the price of a stock to fall. It involves selling shares by borrowing them from another institution and then betting that they can buy them back at a lower price and profit from the difference. Short selling became a high profile and controversial tactic during the global financial crisis when many fragile banks were the targets of the stock market vultures and some were forced to accept nationalisation and emergency financial support.