Hedge Funds Bet Big Against Evergrande a Day Before Stock Soared
- Short interest jumped to 18.5% of free float: IHS Markit data
- Evergrande’s key shareholder agreement helped stoke 19% rally
The China Evergrande Centre, center, in Hong Kong, China, on Sept. 25.
Photographer: Chan Long Hei/BloombergThis article is for subscribers only.
Hedge funds betting against the fortunes of China Evergrande Group got a reminder of why the indebted developer was once Hong Kong’s most painful short.
After steadily reducing wagers against Evergrande shares in recent months, hedge funds and other short sellers rushed back into the trade last week -- just in time to get burned. They nearly doubled short interest in Evergrande’s stock on Sept. 29, a day before the developer rallied 19% on abating concerns over a cash crunch, data compiled by IHS Markit Ltd. showed.