Telegraph.co.uk – Hedge funds are sitting on damaging multi-million pound losses after betting last month that Virgin Mobile was overvalued and that its share price would fall.
Following disappointing results from Vodafone and gloomy high street sentiment, hedge funds sold Virgin Mobile’s stock “short” as a way of profiting from a fall in the price.
But since the Sunday Telegraph revealed last week that NTL was planning a takeover of Virgin Mobile, the shares have rocketed. On Friday they closed at 343.75p, a rise of more than 10 per cent on the week.
Analysts estimate that hedge funds that betted incorrectly on Virgin Mobile are sitting on losses that could top £12m.
