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Intrum’s share price dropped sharply on Monday after short seller Muddy Waters disclosed it was betting against the firm’s stock price. The debt purchasing sector has been a popular target for short sellers for years, but the impact of coronavirus and associated measures is a further heavy blow.
The new Muddy Waters short position, amounting to 0.5% of the Swedish firm’s market capitalisation, was not accompanied by a report. Intrum’s share price did appear to react to the move, suffering a sudden 16% fall in share price in mid-afternoon trading. It ended the day down 23%.
Investors may have been reacting to Muddy Waters’ track record in causing share prices to sink, after its accusations of poor financial reporting at both Burford Capital and NMC Health in the last year. Burford’s share price has not recovered, while NMC Health has since revealed that it had more than double the debt it had previously disclosed to the market.
As a debt collector, Intrum is likely to be heavily exposed...