Johann Rupert’s Richemont gains 2.4 percent in single day as investors react to hedge fund taking equity position

Shares in South African billionaire Johann Rupert’s leading luxury goods maker, Compagnie Financiere Richemont, have increased by 2.4 percent to a new all-time high today, as investors intensified buying interest in the company’s shares on the SIX Swiss Exchange.

Research conducted by Billionaires.Africa revealed that the share price as of press time, Nov. 8, jumped to CHF124.2 ($135.9) amid reports that U.S. hedge fund Third Point Management has built up a healthy stake in Richemont. Third Point was founded by U.S. investor Daniel Loeb.

Third Point currently owns a 1.2-percent stake in the Switzerland-based company.

Recently, the hedge fund has reportedly pressed Richemont to reduce its exposure to loss-making subsidiaries in a bid to improve its financial performance.

Last year, Richemont reported bleak financial results and suffered a drop in its share price due to the COVID-19 pandemic. However, since the start of this year, its share price has increased by more than 50 percent, causing Rupert’s net worth to skyrocket by over $2.5 billion since January.

As of press time, Rupert, who controls the leading luxury goods maker, has seen his net worth surge above the $10.5-billion mark.

His $10.6-billion net worth makes him the wealthiest man in South Africa and the second richest man in Africa behind Nigerian billionaire industrialist Aliko Dangote, who is worth $19.2 billion.

In an effort to improve Richemont’s financial performance and its asset quality, the company has been in talks with investors to offload shares in Yoox Net-a-Porter (YNAP), as the online distributor continues to rake in losses.

The decision to offload the shares came as YNAP sales and revenue growth began to lag behind Farfetch and other competitors.

In addition to the outright sale of YNAP, Richemont is also considering a capital raise of $100 million to bolster its operations.