Mike Ashley gambles again that Frasers’ stock will rise

The former CEO and founder of Frasers Group Plc pledged around 26 million shares, equivalent to roughly 5% of the company, to HSBC as security for derivatives bets he placed.

Retail tycoon Mike Ashley has ramped up bets that the stock price of his UK retail empire will rise, putting up about £196m (€222m) worth of shares as security on the gamble.

The former CEO and founder of Frasers Group Plc pledged around 26 million shares, equivalent to roughly 5% of the company, to HSBC as security for derivatives bets he placed, the company said Tuesday.

Recently Mr Ashley sold options betting that shares in Frasers, which owns the country’s biggest sportswear retailer Sports Direct, will rise above 800 pence by September. That’s on top of previous bets that the stock would rise to 900 pence. The share price is currently 761.5 pence.

Mr Ashley still holds about 70% of Frasers, formerly known as Sports Direct, which also owns stores including Flannels, House of Fraser, Jack Wills and Gieves & Hawkes.

He is no stranger to gambling. In 2017, former banker Jeff Blue sued Mr Ashley, claiming that the businessman agreed to pay him £15m if he could double Sports Direct’s share price in three years. The deal was sealed during a boozy meeting in a London pub where Mr Ashley allegedly vomited into a fireplace after challenging an analyst to a drinking competition.

Last year, Mr Ashley handed the CEO role to his son-in-law Michael Murray and stepped down from the Frasers board. Mr Murray could earn a bonus of £100m in shares if Frasers’ stock hits £15 a share for 30 consecutive trading days by October 2025.

- Bloomberg