THG stock plunges after investor presentation

By Abhinav Ramnarayan and Julien Ponthus

LONDON (Reuters) – Softbank-backed online retailer THG lost more than a third of its value on Tuesday after hosting an investor presentation aimed at reassuring the market that it could reverse the recent drop in price of action.

The stock fell sharply in the late afternoon and closed 34.75% lower at 285 pence. The stock has now lost almost 60% since September, having been listed last year when it sold shares at 500p each.

No clear single trigger for the sudden sale was apparent, and the company did not immediately respond to a request for comment.

“What, in my opinion, drove the sale was a number of different factors,” said Susannah Streeter, analyst at Hargreaves Lansdown.

She listed profit warnings in the online retail sector, rising interest rates hurting the attractiveness of growing companies and the planned spin-off of THG’s beauty arm.

“There are also reports that a number of different institutional investors have sold shares,” she added.

THG was expected to detail plans for its e-commerce services business, THG Ingenuity, and present its ESG strategy on Tuesday’s capital market day.

But it ended the day ahead of the London Stock Exchange losers after recording its worst day in its one-year trading history.

THG completed last year what was at the time the largest London Stock Exchange debut in terms of market capitalization since Royal Mail in 2013. The deal grossed the company £ 920million while shareholders, led by founder Matthew Molding and private equity group KKR shared gross proceeds of £ 961 million.

KKR has sold its entire stake in the listing.

The company listed on the standard segment of the London Stock Exchange as a founder retained enhanced shareholder rights, thus prohibiting it from premium listing and access to FTSE indices.

Several London-listed companies at high valuations on the back of their online platform credentials have struggled in recent weeks, with iconic boot brand Dr Martens and online card retailer Moonpig all trading two well below their list price.

In May, THG raised $ 1 billion in new shares, including $ 730 million from Japanese group Softbank. He also said he plans to turn his THG Ingenuity platform into a separate company and that Softbank has the option to inject an additional $ 1.6 billion into Ingenuity once that is done.

(Reporting by Julien Ponthus and Abhinav Ramnarayan; Editing by Rachel Armstrong)


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