A period of intense pressure for construction contractor Kier appears to have come to an end as short selling against the contractor has begun to tail off.
Stock held by short sellers betting against the contractor has fallen to 3% with a total value of £30M. By the end of November, almost 14% of the company’s stock was in the hands of short sellers, or those betting against the company and hoping the stock price would fall – meaning around £102M of the company stock was held by the short sellers.
Traders short stocks when they borrow the stock, and then sell that stock off in the hopes that the price will drop, meaning they can purchase it back at a lower price and pocket the difference.
The share of the company in the hands of short sellers has now dropped to just 3.65% of the company’s value, or a £30M share of the £833M total market value.
Kier recently won a large volume of work on the North West Construction Hub framework, the total framework is worth £1.5bn and Kier was one of only two contractors to win work on all three lots of the framework.
However, Kier have come under fire for works it carried out in the Barrowby Gate area of Grantham, Lincolnshire in September last year. The resurfacing job failed to adhere to the road and Kier have committed to repeating the works at their own cost.
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