A loss as painful as stepping on a Lego.
Kirkbi, which oversees about US$16 billion on behalf of the Kirk Kristiansen family that owns Lego, saw the value of its holdings fall about US$150 million on Wednesday. The trigger was a profit warning from ISS A/S, which shaved 20% off the market value of the Danish office-service firm. The estimated dent to the Lego family fortune is based on regulatory filings showing it holds roughly 15% of ISS. Kirkbi declined to comment.
The Lego billionaires have stayed loyal to ISS despite a build-up in short interest against the company, currently at around 7.5% of its share capital. That’s among the highest when it comes to Danish stocks. Hedge-fund speculation against ISS has coincided with a strategy shift in which ISS Chief Executive Officer Jeff Gravenhorst says he only wants to target the biggest clients, and ditch smaller customers. On Wednesday, he said his strategy still makes sense, but acknowledged he’d been"too ambitious” in his approach.
In a phone interview, Gravenhorst said he is"extremely sorry” for the profit warning. But he tried to reassure investors that"2020 will be good.” Gravenhorst also acknowledged that the latest downgrade -- his second since August -- raises questions about his status as CEO.This story is exclusively For StarBiz Premium subscribers only.
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