Citadel, BlackRock, and D1 Capital are racking up hundreds of millions in gains as coronavirus fears tank airlines, cruises, and movie-theater stocks
What might end up being the worst week for stocks in over a decade hurt a little less for some asset managers.
BlackRock, Citadel, D1 Capital, and Adelphi Capital were all able to make millions on short positions of airlines, cruise companies, movie theaters, and malls — companies that were directly impacted by the public health crisis created by the quickly spreading coronavirus.
According to data from German tracker Breakout Point, BlackRock was the only holder of a short position greater 0.5% of the company’s issued share capital — which European regulations require to be disclosed — of Carnival cruises. Carnival owns the Princess cruise line, which made headlines for the infected passengers in Japan.
The short taken out by Larry Fink’s manager tallied up gains of roughly $75 million for the world’s largest asset manager, according to Breakout Point. BlackRock declined to comment.
Ken Griffin’s Citadel meanwhile loaded up on short positions on European airlines — the biggest on Lufthansa, which has fallen by roughly a fifth since last week. Other short positions from Citadel included Air France, EasyJet, Wizz Air, and SAS. Just the shorts on Lufthansa and Air France, Breakout Point estimates, generated more than $77 million in gains for Citadel.
Citadel has pared back its shorts on Wizz Air and SAS and collected profits there, filings show.
The economic impact of the coronavirus outbreak is expected to eventually impact nearly every industry and developed market, but some sectors have shown the effects quicker than others. Shopping and trips to the movies, for example, are hurt when people want to limit exposure to others.
Dan Sundheim’s D1 Capital placed a large short position earlier in February against EPR Properties, which owns the real estate of hundreds of movie theaters, golf courses, ski resorts, and other “experiential” venues, as well as London-based Cineworld, which has seen its stock price fall by roughly a third since the start of the year. This week, the firm has cut down on its Cineworld short to bring in profits, but still maintains a bet against the company.
Adelphi Capital meanwhile has increased it short positions this month against three different European real-estate companies — two Dutch companies, Wereldhave NV and Eurocommercial Properties NV, and Hamburg-based Deutsche EuroShop AG — that run shopping malls. Eurocommercial Properties has a significant presence in Italy, where coronavirus has spread rapidly in recent days.
D1, Citadel, and Adelphi did not respond immediately to requests for comment.
– Buisness Insider