The big CBA short
Analysts have been arguing for years that Commonwealth Bank is overvalued. Now Regal's Phil King has put his money where his mouth is and sold CBA short — not that investors seem to care.
It’s hard to find a voice in the market who would argue Commonwealth Bank, no matter how well it’s going, is worth the sticker price. Almost every sell-side analyst has a “sell” on the stock and has done for the better part of two years.
But now someone has finally stuck their head above the parapet and sold CBA short. Regal Partners chief investment officer Phil King told Bloomberg he had initiated a short position on the bank “earlier this year”. Since January its shares are up more than 12%.
Just like the dozens of other reports exhorting shareholders to sell, the Regal news had no impact with CBA shares up again today.
But as we’ve argued in Capital Brief, CBA is that rarest of stocks, a blue-chip “widowmaker”. Analysts argue the whole big bank sector in Australia is overvalued, although they can’t identify any key support.
