Troubled Serco could be target for short-sellers
Struggling outsourcing firm Serco is attracting attention from short-sellers, who are expecting further bad news from the company this year.
Hampshire-based Serco revealed in November that it was to raise £550m through a rights issue, at the same time announcing a profit warning for 2014. The firm did not pay a dividend last year as part of its attempts to deal with its debt situation.
Institutions and hedge funds including BlackRock, BlueCrest and JP Morgan are reported to be counting on a fall in Serco’s share price, which has risen by 25 per cent so far this year.
Serco has been beset by a series of difficulties in the recent past. As well as its financial problems, the firm was investigated in 2013 for over-charging the government for the electronic tagging of criminals.
Serco declined to comment yesterday.