Frasers Group recently made a move to strengthen its position in ASOS, a popular online fashion retailer, by increasing its equity interest in the company. While Frasers Group is showing confidence in ASOS, there is also a notable presence of “short sellers” who are betting against the stock.

Short selling is a strategy employed by investors who predict a decline in a stock’s price. These investors borrow shares from a broker and sell them, hoping to repurchase them at a lower price in the future and return them to the broker. Currently, nine investment firms have placed their bets against ASOS, making it the most shorted pick on the London Stock Exchange.

ASOS has been facing difficulties in recent months, witnessing a staggering 80% drop in its share price since February of the previous year. A profit warning issued in early November only heightened the interest from short sellers. In response to these challenges, ASOS CEO José Antonio Ramos Calamonte has taken measures to reduce costs and improve the company’s performance.

On the other hand, the increased direct stake taken by Frasers Group in ASOS shows their confidence in the retailer. Although their overall holding has slightly decreased, the purchase of more shares directly is a significant move. This has resulted in a 1% increase in ASOS’ stock price on Tuesday.

The future prospects for ASOS remain uncertain. The company faces fierce competition in the online fashion market, and short sellers are banking on its continued struggles. However, with the support of Frasers Group and the implementation of strategic cost-cutting initiatives, ASOS may be able to reverse its fortunes and restore investor confidence.

For more information on this topic, you may refer to the following reliable sources:

1. The Guardian: Frasers takes bigger stake in online fashion firm ASOS
2. BBC News: Frasers increases stake in ASOS despite short seller bets