Investments  

Patient Capital share price collapses after Woodford quits

Mr Woodford created Woodford Investment Management in 2014, saying he wanted to do things “differently” to all of the other fund managers in the market, with a higher level of disclosure to investors and greater use of social media to communicate.

It may be that his enhanced disclosure was part of his downfall, as the market knew the names of all of his holdings, rather than just the top 10 as with most other funds, and so there would be negative coverage whenever any of the holdings released bad news. This would prompt investors to exit the fund, creating a liquidity problem. 

Short-sellers would then notice the outflows and, realising this would eventually mean he would have to sell some of the less liquid and unquoted holdings, begin to take short positions in those investments, pushing the prices downwards, and thus making it harder for Mr Woodford to sell, exacerbating the problem. 

david.thorpe@ft.com