THG shares data on claims of ‘irregular trading of its shares’
British online retail company THG has handed information to regulators over what its billionaire founder, Matthew Moulding, has described as a coordinated attack on its share price.
THG, formerly known as the Hut Group, shared data with the Financial Conduct Authority (FCA) related to what it claims is irregular trading of its shares.
THG floated as one of the UK’s most prominent tech successes, but it has endured a torrid 12 months after investors questioned its value.
After rising from a value of £5.6bn after its first day on the London Stock Exchange to £13bn in January 2021, it plunged in the autumn and on Friday stood at £2.8bn.
Most of THG’s earnings come from retail websites such as the makeup seller Look-fantastic and sports nutrition site Myprotein.
Moulding had pinned his hopes on the growth of Ingenuity, a division building direct-to-consumer websites for other companies but that unravelled when shares slumped by a third following a presentation he made to investors .
It is understood some of the data shared by THG with the FCA related to trading patterns on 12 October, the day of a large share price drop. The data handover was first reported by the Sunday Times.
Moulding has said THG was subjected to a “pretty aggressive short attack” and likened shorting (in which investors bet on share prices falling) to robbing a bank, in an interview last year with GQ magazine.
The company has so far made public little evidence to back up its claim of a coordinated attack.
THG handed over data after the regulator approached it as part of inquiries into the actions of a salesperson at Numis, a City of London stockbroker.
Numis had been one of the investment banks running THG’s initial public offering in September 2020, but its analysts’ view of the company turned negative. In October 2021, following Moulding’s investor presentation, a Numis analyst ascribed a value of 235p to shares. Their value fell to 194p on Friday.
In November, shortly after THG shares hit a record low but several weeks after the initial slump, a Numis salesperson sent clients a note on THG that included references to “irregularities in accounting”. However, Numis quickly retracted what it described as “inaccuracies” in the note and removed the reference to accounting irregularities.
A Numis spokesperson in November confirmed that the company had corrected the note to clients and apologised. Numis declined to comment further. THG and the FCA declined to comment.