Big online hope THG slides 21%
ECOMMERCE group THG’s shares sank more than 21 per cent to 242p after its third-quarter trading update and corporate governance reforms failed to win over nervous investors.
The online retailer and tech services group said that it is looking to hire an independent chairman and that Japanese investment group Softbank is getting a seat on its board as part of a drive to improve its transparency and accountability.
It added that its quarterly sales had increased 34.3 per cent to £507.8million.
Founder, chief executive and executive chairman Matthew Moulding is relaxing his grip on the group in a bid to win over doubters.
To bring this about he has pledged to give up his special share that guarantees him control.
Loss-making THG was the biggest ever technology flotation on the London Stock Exchange when it listed its shares at 500p in September last year.
They hit a high of 837.8p in January but since then the shares progressively slid before tumbling last month.
Experts attribute collapse to concerns over its profitability, its corporate governance structure and shareholder structure, its strategy and its valuation.
Earlier this month it announced plans to sell its beauty division, one of its key businesses. But THG was upbeat at its update about its Ingenuity division, which offers brands that want to sell online everything from web design to payments and delivery.
AJ Bell investment director Russ Mould said: “When it was floated, it seemed to press all the right buttons at the time, technology and online retail. But all the issues the dinosaurs raised when THG was floated have come home to roost.”
He added that having seen the company ditch its corporate governance and share holding structure as well as strategy in just over a year after floating, investors are worried that its response to its share price slide is to “appease people rather than lay down a clear, long-term strategy”.
Richard Hunter, at Interactive Investor, said: “In the UK we have so few big tech success stories that I suspect people just went along with it at first. But now the optimism is fading away.”