Bodenholm's Johansson Short Sells Spain's ACS as Shares Fall

Hedge fund manager Per Johansson is shorting Madrid-based Actividades de Construccion y Servicios SA because he alleges the construction company has overstated its earnings, the co-founder of Bodenholm Capital AB said at a conference in London on Thursday. ACS’s shares fell.

The Spanish firm has “accounting irregularities” and there are corporate governance issues, Johansson alleged. He forecast a 40 percent decline in its share price. Johansson said ACS has “a lot of hidden liabilities” and there are “signs of problematic project execution.”

The comments are “groundless” and based on a labor case that was dismissed by a judge, ACS said in a statement on Friday.

A former Fidelity International Ltd. portfolio manager, Johansson started Bodenholm Capital earlier this year with backing from Brummer & Partners, a Stockholm-based hedge fund allocator. 

Shares in ACS fell as much as 6.1 percent on Friday, the most in more than three months, and were trading at 28.62 euros at 12:30 p.m. in Madrid. The stock slid 4.5 percent Thursday, the worst performer in the Stoxx 600’s index of construction companies.

Sixteen research analysts rate the stock as a buy, five as a hold and none recommend selling, according to data compiled by Bloomberg.

Short sellers sell borrowed shares hoping to buy them back at lower prices and pocket the difference as profit.

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