Shares in Halifax Bank Of Scotland closed below their rights issue price last night after the bank's chief executive Andy Hornby discovered that fund manager Harbinger Capital Partners is his chief tormentor.
Its Harbinger Capital Partners Master fund 1 became the first investor to reveal a short position in HBOS shares, announcing a position equivalent to 3.29% of the bank's shares.
The fund which specialises in "distressed, stressed, troubled, undervalued or event/special situation assets" is overseen by former Barclays Capital head of high-yield trading Philip Falcone.
Falcone was one of Wall Street's highest earners last year after betting against sub-prime loans.
Following Harbinger Capital Partners' announcement, Meditor Capital Management and Lansdowne Partners also revealed smaller short positions.
The disclosures come after new rules introduced by the Financial Services Authority came into force on Friday forcing investors to disclose their positions if they are betting on a company's shares falling in value while it undertakes a fundraising.
HBOS is seeking £4bn from investors at 275p a share.
Yesterday it closed at 270.5p, a 4.25% fall, making it virtually pointless for investors to take up the issue and potentially leaving a large number of shares in the hands of the investment banks that have underwritten the issue.
A raft of investors also disclosed short positions in newspaper publisher Johnston Press.
These include Lone Pine Capital, Fox Point Capital, Trafalgar Asset Managers and Valinor Management.
Shares in the publisher of the Scotsman and Yorkshire Post newspapers closed up 1% at 72p, well above its 53p a share issue price.
Its nil paid rights - the right to buy shares under the issue closed down 6.25% at 15p.
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