Hedge funds singled out WHSmith as a top short in July, weeks before the UK-listed travel retailer’s shares plunged more than 45% on Thursday after disclosing a major accounting error in its North America unit, according to a report by Reuters.

According to Hazeltree’s Shortside Crowdedness Report, WH Smith ranked as the most crowded UK and European small-cap short position last month. Public disclosures show firms including Citadel Advisors and Man Group had significant bearish bets in place.

The company has now cut its full-year profit forecast after revealing it had overstated earnings by around £30m, largely due to supplier income being booked too early in North America. WHSmith expects pre-tax profit of £110m for the year to 31 August, well below consensus estimates of £157m (LSEG data).

Analysts have since downgraded target prices, citing pressure from high debt levels and broader weakness across global travel retail.

Hazeltree’s report, based on data from 700 managers covering 15,000 stocks, also highlighted elevated short interest in entertainment ticketing, luxury drinks and semiconductor firms.