Liontown bid brings lithium armageddon upon hedge funds

A short seller's worst nightmare is to have short-sold stock that emerges as a takeover target from a credible buyer. The prospect of a takeover bid is a factor they have to accept is always possible. But an announced bid typically does not exceed a 30 per cent premium to the last traded price, even if it does ultimately go higher. A massive 63 per cent premium is not an outcome many traders would have been prepared for. Spreading the pain Hedge funds also typically spread their short bets if they're taking a view on a sector rather than targeting…