The big salmon short: Crisis for Atlantic Sapphire is opportunity for others

Aslak Berge

Two asset managers have shorted 1.5 million shares in Atlantic Sapphire.

The land-based salmon farmer Atlantic Sapphire has had a brutal 2021, with salmon deaths, lack of oxygen and, most recently, a major fire at the plant in Denmark. The share price has fallen by 74 per cent in the last six months.

Read also:  Atlantic Sapphire may decide not to rebuild Danish facility destroyed by fire

But on the stock exchange, such crises can also bring opportunities.

Two players have made particularly good use of land based farmer’s miserable year. They are employees at the London office of JP Morgan Asset Management and the US hedge fund WorldQuant. These two have sold Atlantic Sapphire shares short in several rounds – and presumably made generous gains. JP Morgan Asset Management has been particularly active, having signed up for five different short trades so far in 2021.

Selling shares short means that an investor sells borrowed shares, and later buys them back. The purpose is to profit from an expected price drop.

Read also: JP Morgan bets $5.5 million on Atlantic Sapphire share price fall

According to the the Norwegian Financial Supervisory Authority, only these two currently hold short positions in Atlantic Sapphire. The duo holds a total of 1.5 million shorted shares, of which JP Morgan Asset Management holds close to two thirds of these.

JP Morgan placed its short on 27 August, when the share price ended the day at NOK 50.20, while WorldQuant went short three days ago, on 13 September. At that time, the share price was NOK 47.60.

Now both are sitting on a generous win. After lunch on Thursday, Atlantic Sapphire trades was trading at around NOK 37.

WorldQuant, based in Old Greenwich, Connecticut, manages assets of around US$5 billion, and is run by the Belarusian Igor Tulchinsky.


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