After Lansdowne Partners‘ longstanding short in Tesco PLC ( TSCO), it appears Steve Mandel’s Lone Pine Capital also thinks that Tesco is headed for trouble. According to a filing recently made with the FCA, Lone Pine Capital has a .5% short position in the consumer discretionary company. It is very likely that Lone Pine was shorting Tesco for some time but that the position only recently eclipsed the threshold level of .5%, which demands public disclosure.
Chart via Novus research
Tesco fell 9% in four weeks London’s leading hedge fund, Lansdowne Partners, is shorting .74% of Tesco’s outstanding shares. The fund has been shorting Tesco for nearly two years now. Tesco has been a fruitful bet for short-sellers, as shares of the supermarket chain have fallen by 26% this year. U.K’s supermarkets have come under a storm of short bets. The sector has been threatened by discount retailers like Aldi and Lidl, both of which are Germany-based retailers. Faring the worst in this situation are Tesco PLC ( TSCO) and Wm. Morrison Supermarkets plc ( MRW). Tesco and Wm. Morrison lose market share In a recent note, Bernstein Research rated Tesco as Underperform and said that the course of the company will become clearer over the next 12 months. In a separate note, Bernstein said that Tesco had the largest fall in the U.K’s food retail sector, going even lower than Wm. Morrison. Bernstein said that previously the market share that Tesco and Wm. Morrison were losing was proportional to what Aldi and Lidl were gaining, but this dynamic is not in play anymore, as Tesco and Wm. Morrison are now underperforming all grocers across the board. Figures from Kantar showed that Tesco suffered a 1.4% loss in market share, whereas sales declined by 3.8% in the 12 weeks ending on July 20. During the same period, Morrison lost .5% market share, whereas Aldi and Lidl gained 32% and 19.5%, respectively.