Harbinger Shorting HSBC Shares

Mar 10 2009 | 12:27pm ET

Harbinger Capital Management is jumping on the bandwagon shorting British banking stocks. The activist hedge fund shop reported a £110 million (US$153.9 million) short position in HSBC, in the wake of the bank’s huge rights issue and fellow hedge fund Eton Park Capital Management’s £160 million (US$223.8 million) profit shorting HSBC shares.

Harbinger disclosed the 0.26% position in a regulatory filing. The hedge fund is no stranger to betting against British banking, having made a killing shoring HBOS shares last year. It has also recently reported big short positions in several Spanish banks, including BBVA, Banco Santander, Banco Popular and Sabadell.

In the months since the U.K. ended its ban on short-selling financial stocks, several hedge funds have made a killing doing just that. Paulson & Co. made $67 million in just 25 minutes betting against Lloyds Banking Group in February, and in January made a £275 million (US$389.5 million) profit when it covered a short position in the Royal Bank of Scotland. Also in January, Lansdowne Partners disclosed a big short position in Barclays on the day the bank’s shares fell by more than a quarter.

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