Can the Reddit army save the plunging Unibail (ASX:URW) share price today?

The Unibail (ASX: URW) share price has dropped 5.6% this mornng. But the past 3 trading days tell a different tale. Here’s why.
The post Can the Reddit army save the plunging Unibail (ASX:URW) share price today? appeared first on The Motley Fool Australia. –

A yellow warning sign with black and red arrows going up and down, indicating ASX share market chaos

They’ve been labelled the Reddit army. A loose collection of retail investors linked through social media apps like WallStreetBets. And in recent weeks they’ve shown just how much money and influence their united front can bring to bear in global share markets.

The targets have largely been institutional short sellers. Hedge funds who take positions against a company’s shares. Meaning they make money when the share price goes down… and lose money when the share price goes up.

If the share price goes up a lot, short sellers are often forced to cover their positions. That can see them buying back the shares they borrowed and sold, creating even more demand for the shares and driving the price even higher. You’ll hear this called a short squeeze.

While much of the action has centred on US markets – think GameStop Corp (NYSE: GME) – the ASX-listed Unibail-Rodamco-Westfield (ASX: URW) share price has also been swept up in the Reddit army’s assault on short sellers.

How the Reddit army is driving the Unibail share price

The Unibail share price is falling hard today, down 5.6% in late morning trade. That compares to a 1.2% gain on the S&P/ASX 200 Index (ASX: XJO)

But the last 3 trading days were a very different story. Unibail’s share price gained 14.5% on Thursday, and by the closing bell yesterday it was up 18.5% from Wednesday’s closing price.

The impetus behind the sharp rally appears to lie largely with the Reddit army targeting short sellers of the retail chain, including US hedge fund D1 Capital.

According to the Australian Financial Review:

European market disclosures that require funds to reveal their short bets showed three D1 Capital entities had a collective 7.84 per cent short interest in URW’s Paris- and Amsterdam-listed shares.

Short-selling volumes increased by eight times the average daily volume on Friday to 1.8 million shares for the ASX-traded security.

A global scramble to cover, traders say, contributed to the share price spike.

Short sellers can and do make money at times. But the risk is high. While the most you can lose by going long on a stock (buying shares) is what you pay for it, the losses for short selling are theoretically unlimited.

Invest with care.

Unibail-Rodamco-Westfield company snapshot

Unibail is one of Europe’s largest commercial real estate companies, owning a portfolio of quality retail and office complexes. It has assets in Europe, the United Kingdom and the United States.

Unibail acquired Australian shopping centre operator Westfield Corporation, created by the split of Westfield Group, in 2018. This saw Unibail shares first listing on the ASX as Unibail-Rodamco-Westfield.

Over that past 12 months, the Unibail share price remains down 49%.

Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

Find out the names of our 3 Post COVID Stocks – For FREE!

*Returns as of 6/8/2020

More reading

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Can the Reddit army save the plunging Unibail (ASX:URW) share price today? appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!