U.S. activist hedge fund Elliott Management, currently campaigning for more change at BP in its capacity as a BP shareholder, has taken a big short position in Shell, according to financial filings.
Elliott’s short position, which is designed to make money if Shell’s share price falls, amounts to about 0.5% of Shell, according to data published on the website of the Financial Conduct Authority (FCA) on Thursday. That is the biggest short position in the company since 2016, the data showed.
Elliott took the position on Tuesday, when Shell gave an investor update revealing further cost cuts, according to the FCA data.
Shell has a market capitalisation of 169 billion pounds ($218.72 billion) as of Friday.
Elliott and other hedge funds typically hedge their long positions in companies with short positions in others. Elliott has also taken a 0.6% short position in BP’s rival TotalEnergies this month, according to filings to France’s financial regulator AMF.
TotalEnergies’ market capitalisation is 136.74 billion euros ($147.69 billion).
Elliott Management has met several large shareholders in BP to try to forge a consensus for more changes at the oil major that could include cost cuts, more disposals and a potential leadership reshuffle, shareholders have told Reuters.
BP’s share price has underperformed rivals like Shell and Exxon in the last five years, which investors have blamed in part on the company’s 2020 plan to focus on growing its renewable business while cutting oil and gas production.
(Reporting by Shadia Nasralla and Anousha Sakoui; additional reporting by America Hernandez in Paris; editing by David Evans and Jan Harvey)