• Research


  1. RESEARCH

  2. For access to the research report, please fill in your details below

Oct 10, 2018

S3 Analytics: Money Laundering Scandal Spurs Danske Bank Short Selling

Danske Bank shares remain under a cloud of a massive money laundering scandal even after the stock price has dropped 27% from $30.32 down to $22.06.

Short sellers have piled onto the trade since August 24 earning paper profits of $21.5 million, an estimated return of 30.84%.

Denmark’s biggest bank has revealed that as much as $235 billion in possible “suspicious transactions” flowed through a tiny Estonian affiliate over a nine-year period. Chief executive Thomas Borgen has been relieved of his duties.

In recent weeks continuing disclosure has prompted increased short activity.  The number of shares shorted has increased to 3.57 million shares from 1.7 million shares a rise of 150%.

Value hunters see a bargain, pointing out that at the $22 level, shares trade well below modified price targets. Despite the slide, 16 buy recommendations remain, with some suggesting a possible rebound of as much as 50%.

But watch out. According to Ihor Dusaniwsky, managing director of predictive analytics at S3Partners: “The rise of short positions shows that despite reports to the contrary conviction remains high that more trouble lies ahead.”

Some analysts predict that $1.8 billion in penalties could be in order, though it may take a full year to determine the size of these potential fines. Financial regulators in Europe and Great Britain including the United States Department of Justice are examining the bank’s oversight and the money laundering allegations.

Research Note written by Jack Willoughby
Want deeper insight into the above analysis?
Contact:  Ihor.Dusaniwsky@S3Partners.net
                 Managing Director Predictive Analytics, S3 Partners, LLC
The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC ('S3 Partners') to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks and merits, as well as the legal, tax, accounting and investment consequences, of such decision.


To learn more about S3 Short Interest data, BLACKLIGHT Treasury Management, and Counterparty Risk Solutions, click here

To trial the S3 BLACK APP – the Definitive Source of Real-Time Short Interest - type APPS BLACK <GO> on the Bloomberg terminal

The BLACK APP is now available on Thomson Reuters Eikon! For a free trial, go to the App Library and open the App Studio