Shadowfall takes short position in Darktrace shares

The FCA’s latest short positions data, released on Friday, showed Shadowfall had shorted about 0.52% of Darktrace’s stock.

Based on Darktrace’s current market capitalisation of £2.47bn, that position had an estimated value of around £12.8m, according to City AM.

City AM noted that Shadowfall, led by Matthew Earl, also called the ‘dark destroyer’, gained previous notoriety for its actions against fraudulent payment processor Wirecard, which faced a major crisis in 2020.

The fund has also made bearish bets against fast-fashion firm Asos and Apple supplier IQE.

Since debuting on the London Stock Exchange in 2021, Darktrace has faced a series of challenges, experiencing a sharp decline earlier this year due to criticism related to its sales, marketing, and accounting practices.

However, in September, Darktrace reported a significant increase in annual profit, surging from $5.3m to $41m for the 12 months ended 30 June.

Short selling involves investors purchasing shares and selling them on the market with the expectation of repurchasing them at a lower price in the future, thus profiting from a decline in the share price.

At 0846 GMT, shares in Darktrace were down 0.49% at 348.7p.

Reporting by Josh White for Sharecast.com.