The hedge fund Millennium International Management, one of the most active bearish funds on the Spanish stock market, declared yesterday to the CNMV a short position of 0.53% of the capital of the pharmaceutical company Grifols, after having closed another short position, of 0.53%. 42%, with huge benefits, with the collapse caused by the Gotham City Research report last week.
Millenium, founded in 1989 by Israel Englander and Ronald Shear, is one of the bassists that has been most aggressive in recent years with Spanish companies. In the summer it withdrew, closing with losses, from important positions such as Enagás (it managed to borrow 7% of its capital) or the Colonial SOCIMI (0.5%). Among its most notable targets are BBVA (it had 0.5%), Bankinter (1.64%), Mapfre (0.52%), Banc Sabadell (0.56%) and Sacyr (1.02%).
The fund, which last year managed assets of 58 billion euros according to Forbes, is very agile in its operations, and on numerous occasions it has changed its position: in Bankinter, after selling the shares aggressively, it became a shareholder significant at 1%. Forbes ranks Israel Englander, its founder, as the eighth richest financier in the world, with a net worth of $11.5 billion.
Millenium’s bet against Grifols once again triggered the volatility of the stock on the stock market, which fell more than 6% and closed with a drop of 4.27%, to 8.6 euros.
The collapse in the stock caused by Gotham’s report last week, which held 0.57% of the capital through its General Industrial Partners fund, caused a massive closing of short positions. The hedge funds repurchased the shares, which they had sold by borrowing them, after the collapse and in two days the shares of the pharmaceutical company soared by 65%, to around 11 euros.
Gotham itself bought back its shares, with a profit that could have exceeded 20 million euros. Another hedge fund, Ako Capital, which had 0.41% of the capital short, in a position that had accumulated heavy losses, also repurchased its shares with the collapse.
Gotham City Research, known in Spain for having revealed the accounting fraud of the Internet company Gowex, published a report on Tuesday accusing the Grifols family pharmaceutical company of hiding its real debt and concealing its accounts, and of irregularities in operations with Scranton, a company linked to the family, to the detriment of minority shareholders.
The CNMV has opened an investigation to analyze the operations reported by the hedge fund. The investigations are currently focused exclusively on Grifols, but if they do not lead to significant aspects, the supervisor could turn to the bearish Gotham City Research fund, with which there has been no contact.
