Takata Surge Unwelcome for Short-Sellers Including Lansdowneby
Air-bag maker behind record recall soars by limit in Tokyo
Investors have bet rising costs would push share price lower
Takata Corp.’s record 21 percent surge is unwelcome news for short-sellers including Lansdowne Partners, the London-based hedge fund wagering on a decline.
A widening global recall crisis at air-bag maker Takata has drawn investors betting on a slump, with short interest on the shares at 4.6 percent of outstanding stock as of May 24, according to data compiled by Markit Ltd. Lansdowne had a short position equivalent to 2.6 percent of outstanding shares as of May 6, according to filings with the Japan Exchange Group. Lansdowne declined to comment.
Takata shares soared by the daily limit Thursday in Tokyo trading as the supplier to the world’s largest carmakers was said to be in talks with potential buyers including KKR & Co. Talks are at a preliminary stage and KKR isn’t the only candidate, said a person familiar with the matter.
The air-bag maker’s shares are still down 43 percent this year as at least 13 deaths in the U.S. and Malaysia have been linked to defective inflators that can deploy too forcefully, rupture and spray plastic and metal parts at drivers and passengers. Automakers led by Honda Motor Co. had recalled at least 60 million air bags globally before U.S. regulators this month ordered the replacement of as many as 40 million more.