Short positions in UK stocks hit record levels, White & Case

White & Case found short-selling in UK-listed companies reached record levels in the first half of 2026. Twenty-seven companies had disclosed aggregate short positions of at least 5% as of July 6, up 35% from 20 at the end of the first quarter and more than five times the number recorded in the first half of 2025. Hedge funds broadened targets beyond small-cap stocks to include larger established companies across several sectors.

Housebuilder Vistry and building materials group Ibstock recorded the largest disclosed short interests, at about 16% and 13% respectively. Consumer companies made up 56% of the heavily shorted names, industrials represented 22% and technology 11%. Targeted firms had market values ranging from roughly £150 million to nearly £10 billion, with an average market capitalisation near £2 billion.

Globally, White & Case recorded 95 public short activist campaigns in the first half of 2026, including 13 across continental Europe. Technology firms accounted for about 30% of those campaigns. Common allegations raised by activist short sellers included claims of overvaluation, accounting problems, fraud, questions over product effectiveness and broader sector challenges.

The report cited recent UK examples of targeted short activity. A campaign by Viceroy Research focused on Close Brothers Group over provisions for potential liabilities linked to the UK motor finance redress scheme. Wizz Air attracted short-selling attention after warnings that geopolitical tensions involving Iran could affect its operations.

White & Case recommended that listed companies monitor short interest in their own shares and in peer groups, establish internal response plans and prepare communication strategies before activist campaigns become public. The firm advised boards to agree governance procedures to assess short theses, coordinate advisers and decide when a public response is appropriate.

“The current market makes it easier to identify companies trading above perceived fundamental value and creates opportunities for short-focused investors,” — Patrick Sarch, head of UK Public M&A at White & Case. He advised boards to expect more sophisticated campaigns and to incorporate short-selling risk into governance and risk management alongside shareholder activism, regulatory investigations and cyber threats.

The report noted that short selling can support market liquidity, price discovery and market efficiency, while also recording that many short positions ultimately lose money for their holders.