THG CEO Matt Moulding
(Picture: THG)You have to feel sorry for THG investors.
The likes of BlackRock, Henderson and Merian bought shares in the artist formerly known as The Hut Group at around 500p a pop when it listed on the London Stock Exchange back in September 2020.
After peaking at 800p, the stock is now around a fifth of the IPO price. A critical analyst note, a complex deal with SoftBank and plans to pivot towards a small but fast growing e-commerce platform sparked a big sell-off. Long-running governance concerns haven’t helped either.
THG boss Matt Moulding claims he is the victim of a City conspiracy. Critics say he is handling the pressure of being a public CEO poorly.
His fault or not, Moulding is yet to apologise for the value destruction he has overseen and has not promised to make investors their money back. Instead, he said going public “sucked from start to finish” and all but threatened to take the company private.
Now, private equity firms are sniffing around. THG jumped 18% on Friday after a report on M&A blog Betaville claimed Advent, Leonard Green and Apollo were all running the rule. The jump proved short lived, with the stock down 5% today.
If Moulding admits defeat on the stock market, it won’t win him any friends and could create problems down the line. Private equity-owned firms often end up on stock markets. If IPO backers sell to private equity, they face a likely steep loss.
Next time THG starts doing the rounds in the City — or Wall Street, which Moulding now seems keen on — investors will rightly ask: why will it be any different this time?
