Chris Hughes, Columnist

Look What Happens When Hedge Funds Get Burned

Arqiva and Bakkavor's pulled floats might be the result of the short end getting hurt on other big European listings.

November 3, 2017 at 11:42 AM UTC

Chris Hughes is a Bloomberg Opinion columnist covering deals. Previously, he worked for Reuters Breakingviews, the Financial Times and the Independent newspaper.

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Two big European companies pull their IPOs in a day, both blaming market conditions. In fact, market conditions could scarcely be more favorable. The better explanation is that investors -- hedge funds especially -- have lost money on recent sales of new stock and have understandably gone on strike.

Arqiva Ltd, a provider of communications infrastructure, and Bakkavor Group Plc, a food producer, trotted out the standard reasons of market "uncertainty" and "current volatility in the IPO market". True, the V2X index of European stock volatility spiked a bit last month, but this was from historic lows and as things stand volatility in the broader equity market is virtually non-existent. On Friday, the index was at 11.95, just off a year low of 11.05.