JP Morgan unit opens short bet against CAB Payments months after bank worked on IPO
JP Morgan’s asset management arm has taken out a bet against CAB Payments just two months after the firm floated to great fanfare in the capital.
CAB Payments listed in July in what was seen as a boost to the City after a barren start to the year for the IPO market.
The payments firm, which grew out of the colonial-era Crown Agents Bank, fetched an £850m valuation on its debut but has since plunged by some 17 per cent in value.
According to the FCA’s register of short positions, JP Morgan Asset Management has now taken out 0.5 per cent of CAB’s stock on loan as a short bet.
Short positions work by investors borrowing a stock, selling it on and then buying it back on the cheap after the price has plummeted, leaving them with a profit.
JP Morgan Asset Management is currently the only firm with a short position big enough to warrant disclosure to the regulator.
The move may raise some eyebrows as JP Morgan’s investment bank also acted as the sole sponsor of the firm’s float in July. However, its asset management arm and investment bank are two entirely separate units.
CAB’s listing was hailed as a boon to London after a torrid first half of the year in which just 18 firms raised £650m in the first six months of the year – a slump of 30 per cent on the first half of a torrid 2022 which saw just £1.6bn raised in total.
Chief Bhairav Trivedi told City A.M. in June he was “bullish” on London and it was the “home for innovative and growing global businesses”.