Millennium Asset Management takes short position in Flutter

Millennium Asset Management, the hedge fund run by Israel ‘Izzy’ Englander, has taken a short position in Flutter, the owner of betting companies Paddy Power and Betfair.

The hedge fund has taken a bet against 0.51 per cent of Flutter’s shares, which is equivalent to £137 million (€160 million) at the company’s current share price of just under £150. Flutter’s shares have fallen in recent weeks from a high in March of £174 to a recent low of about £147.

A short trade is a risky bet in which a trader borrows shares from a broker and sells them on the open market. The trader waits for the price to fall sufficiently so they can buy new shares, return them to the broker and pocket the difference in profit.

It is predicated on the trader’s conviction that the share price will drop at some point in the future, though it is not always possible to glean what the trader’s full strategy might be.

Given the level of risk inherent in such bets – the losses, if the trade goes wrong, are potentially limitless – regulatory disclosure rules around the size of the trades are higher than the rules around normal equity investments.

Millennium, which was founded by Englander and Ronald Shear in 1989, has about $50 billion in capital under management. It has in the past taken short bets against a number of high-profile Irish companies, including CRH, Kingspan, Smurfit Kappa and Irish Continental Group.

The hedge fund’s bet against Flutter shares comes after the company announced an increase in revenue, average monthly players and earnings for the year to the end of December 2023. Its revenue rose by nearly 25 per cent to $11.8 billion, from $9.4 billion the year before, and its earnings were up by nearly half to $1.8 billion, from $1.2 billion.

The company said the rise in business in the United States drove a lot of the growth, with US revenue up by 40 per cent and average monthly players up by 20 per cent to more than 12 million.

Flutter is in the midst of attempting to move its primary listing to the New York Stock Exchange. Flutter’s current primarily listing is on the London Stock Exchange. It is no longer listed on the Dublin stock exchange.

In an interview with the Financial Times, Peter Jackson, the company’s chief executive, said that opening Flutter’s shares to retail investors was a big draw in moving the listing to New York, which could be followed by possible inclusion on US stock indices.

“We have FanDuel, and we want to make sure that our customers are able to buy shares in the company that owns their favourite entertainment provider,” Jackson said.