Short-sellers scent ‘more pain’ at NCC after profit warnings

Short-sellers have rounded on NCC, raising their bets against the troubled cyber-security firm in anticipation of “more pain ahead”.

Hedge funds have built short positions — a way of profiting from a fall in the share price — covering 7.4% of NCC’s shares, the Financial Conduct Authority has revealed.

That’s 40% higher than a month ago when NCC issued its second profit warning in four months, which led to the departure of the chief executive Rob Cotton. Shares stood at 121p today.

“Short-sellers are betting that there may be more pain ahead for the company’s shareholders as they have continued to add to their already high short positions,” said Simon Colvin, an analyst at Markit.

The short-selling analytics firm’s data show short positions in NCC have surged to almost 11%.

Unlike the FCA, Markit includes positions smaller than 0.5% of a company’s share capital.

Man Group’s Numeric Investors is the biggest short-seller with a 2% position, which it increased a fortnight ago.

Other institutions that have also upped their bets against the firm include BlackRock and Mayfair hedge fund GSA Capital. NCC declined to comment, as did Man Group, BlackRock and GSA.