Wirecard short seller bets against ‘dud’ Covid vaccines

Barry Norris of Argonaut Capital claims ‘witless investors’ are wrongly piling into pharmaceutical companies

An investor who bet against collapsed German firm Wirecard has turned his fire on pharmaceutical companies that he claims are developing “dud” Covid vaccines

Barry Norris, chief executive of Argonaut Capital, said his firm has taken short positions against several drugmakers that he believes are overvalued.

He claims many traders wrongly assume that a Covid vaccine will be a silver bullet, and have pushed prices up far beyond what is reasonable.

The fund manager said: “Witless investors... have been drawn to these stocks like a moth to a flame.  

“I don't think anyone's ever asked [Health Secretary] Matt Hancock, what are his expectations of what a vaccine might do. And if it doesn't stop human to human transmission, are we not going to still be locked down?”

Boris Johnson said that the “realistic but by no means certain” prospect of a vaccine was one of three “rays of sunshine” along with better treatments and testing as he announced a second national lockdown for England on Saturday. 

But Mr Norris claimed that even if companies do succeed in creating vaccines that pass clinical trials, these may not be enough for normal life to resume. 

Successful jabs will be of limited value unless they are effective in elderly or vulnerable people who are at greatest risk of dying from the virus, he said. 

Mr Norris said: “There are quite a few companies with low credibility [and] no track record that have put out press releases saying that they're developing promising Covid vaccines that have next to zero chance of delivering on these."

Argonaut previously bet against Wirecard, which failed amid a huge scandal in June, claiming that the payments company’s governance raised “more red flags than you would see at a communist rally”.

It also shorted private hospital operator NMC Health, a former FTSE 100 firm at the centre of fraud allegations.  Short sellers make money if there is a fall in the share prices of the companies they bet against. 

Mr Norris said that since August he has bet against several US-listed companies, including Vaxart, which has enjoyed a 1,280pc share price rise this year; Curevac, which is up nearly 3,000pc; and Inovio Pharma and Moderna whose shares have tripled in value.