THG shares dive after concerns over tech business
THG shares sank 34 per cent after management failed to win over investors at a presentation on Tuesday afternoon.
Executive chair and chief executive of the group, Matthew Moulding, said the group was under a “short attack” from hedge funds betting against its shares, The Financial Times reported.
The presentation comes after The Analyst, an independent research firm, advised clients to bet against THG’s shares.
The Analyst raised concerns over the prospects for THG’s Ingenuity tech business and called expectations of the division’s growth “unrealistic.”
After a deal with Japanese SoftBank, the division was valued at £4.5bn.
Tuesday’s dive wiped £1.85bn from the company’s market value, falling to £3.48bn from £5.33bn in the morning. Shares had already almost halved in value this year.
The e-commerce company – which owns companies including Cult Beauty, Look Fantastic and Illamasqua – previously outlined plans to spin off its beauty division in a separate listing in 2022.
Formerly named The Hut Group, the brand has also been considering a stock market listing for its technology and logistics divisions.
Investors were looking for “greater visibility over cross charges between the beauty and nutrition businesses and Ingenuity at the capital markets day, which they failed to provide,” one top 30 shareholder told the FT.
The aim of the investor meeting was to do a “better job” of explaining the Ingenuity division, according to THG’s chief financial officer John Gallemore.
The division gives other brands access to the company’s online retailing platform and logistic capabilities through white-labelled websites