THG shares data on allegations of ‘improper trading of its shares’ | THG
UK online retail firm THG has handed over briefing to regulators on what billionaire founder Matthew Molding has described as a coordinated attack on its share price.
THG, formerly known as The Hut Group, has shared data with the Financial Conduct Authority (FCA) regarding what it claims to be irregular trading in its shares.
THG has emerged as one of the UK’s biggest tech hits, but it has endured a scorching 12 months after investors questioned its value.
After going from a value of Â£ 5.6bn after its first day on the London Stock Exchange to Â£ 13bn in January 2021, it plunged in the fall and settled at 2 on Friday, Â£ 8 billion.
Most of THG’s income comes from retail websites such as makeup vendor Lookfantastic and sports nutrition site MyProtein.
Molding had placed its hopes in the growth of Ingenuity, a division building consumer-facing websites for other companies, but which collapsed when shares fell by a third following a presentation that ‘he made to investors.
It is understood that some of the data that THG shared with the FCA was for trading patterns on October 12, the day of a sharp drop in the share price. The release of the data was first reported by The Sunday Times.
Molding said THG had been the subject of a “pretty aggressive short attack” and compared short selling (in which investors bet on declining stock prices) to bank robbery, in an interview last year with GQ magazine.
The company has so far released little evidence to support its claim of a coordinated attack.
THG handed over data after the regulator approached it in connection with an investigation into the actions of a seller at Numis, a City of London stockbroker.
Numis was one of the investment banks to launch THG’s initial public offering in September 2020, but its analysts’ opinion of the company has turned negative. In October 2021, following Molding’s investor presentation, a Numis analyst assigned a value of 235p to the shares. Their value fell to 194p on Friday.
In November, shortly after THG shares hit a record low but several weeks after the initial drop, a Numis salesperson sent clients a note on THG that included references to “accounting irregularities”. However, Numis quickly removed what it called “inaccuracies” in the memo and removed the reference to accounting irregularities.
A Numis spokesperson confirmed in November that the company corrected the rating to customers and apologized. Numis declined to comment further. THG and FCA declined to comment.