A.P. Moller-Maersk A/S is in an unusual place this year as the world’s biggest shipping company finds itself the target of an attack by hedge funds.
For years, there’s been no speculation against Maersk to speak of. In September, short positions represented just 0.8% of the Danish company’s stock. But with a trade war upending the outlook for the global container shipping industry, investors are reviewing their options.
Short interest in Maersk has jumped to about 6% of the share capital this year, according to data compiled by IHS Markit. That’s the highest level on record, with the data going back until 2006 (the numbers have been adjusted for the effect of dividend payments).
The global economy is now firmly in the grip of an escalating trade war. On July 19, President Donald Trump said he’s “ready to go” with new tariffs on $500 billion of Chinese goods destined for the U.S., which roughly corresponds to the value of all imports from China to America.
For a company that controls about a fifth of the world’s container fleet, which transports goods worth $4 trillion a year, the new wave of protectionism could be devastating. Maersk has already lost more than 20% of its market value this year as investors try to digest the changing landscape.