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THG boss Matt Molding relinquishes his stock power to calm investors

Matt Molding is preparing to make a drastic change in the way THG operates after a horrifying week when billions have wiped out the value of his business.


Storm Eyes: THG Boss Matt Molding

Online shopping mogul Matt Molding is preparing to make a drastic change in the way his company operates after a horrifying week when billions of people have wiped out the value of his THG business.

Entrepreneurs listed the company about a year ago, but in recent weeks they have been hit by criticism of how they operate their businesses and failure to disclose information that investors say is essential to raising stock prices. I have received it.

With a desperate effort to alleviate investor anxiety, Molding is ready to dispose of his “golden share.” This is a powerful tool that can exert influence over other shareholders and prevent hostile takeovers.

It also puts THG (formerly known as The Hut, operating Ingenuity in the Beauty, Health and Online Shopping Technology Division) on track from its current standard listing to a premium listing on the London Stock Exchange. This will allow a wider range of funds to automatically access stocks, theoretically supporting stock prices.

The board is also considering appointing SoftBank’s senior executive Andreas Hanson as a non-executive director, Sky News reported. Sunday’s email also urged Molding to accelerate its plans to publish more detailed financial disclosures after clearing £ 417,000 per second from the company’s value in just an hour of trading after Tuesday’s disastrous presentation. I understand that it is being done.

By providing more information about the company’s core beauty business, which operates as Lookfantastic, one investor “holds his head on the biggest piece of the puzzle” and regains some trust. Said it would be useful. By providing markets with more frequent and up-to-date group cash flow forecasts, investors can also eliminate the “question mark” that is expected to disrupt months.

The company will issue a statement about governance changes soon this week. We will also submit a statement of accounts in just nine days. After hitting a low of £ 2.48 last Wednesday morning, it’s another chance for executives to present the olive branch to investors who already have huge losses.

Stocks closed at just £ 2.98 on Friday, even after a slight recovery in the middle of the week. This is less than half the price of the previous month.

The market is nervous that online retailers, who often have low profit margins, find it difficult to deal with the prolonged economic turmoil. This year, shortages and supply chain delays have hit every part of the retail and industry.

However, the fall in stock prices has led investors to rethink the company’s outlook, highlighting the complex nature of THG (valuations are based not only on profits but also on trust in management).

Last weekend, Mail on Sunday released a highly critical note from an analyst in a secret outfit, warning that the stock could fall to £ 2.60. A week ago, we exposed a sudden withdrawal by some major shareholders.

THG still has many fans, including the strong Japanese investor Softbank, which emerged as a major backer in May. Signed an option to acquire shares and buy 20% of THG’s technology and delivery business Ingenuity when it separates from the main group next year and gives it an independent value of £ 4.5 billion. It is said to be a long-term supporter, and it is almost certain that it will remain in that state.

But investors want to know the squiggly room where SoftBank would have to renegotiate options if stock prices didn’t recover. There is also concern that the promise of closer commercial relationships with companies, including Nestlé, has not yet been fulfilled.

Molding told investors Tuesday that the fall in stock prices over the past 10 days was due to an “attack” by short-selling investors who bet on the fall in stock prices to make money. However, according to IHS Markit data, the number of short sellers peaked at less than 2% on September 29, two weeks before the presentation, and steadily declined to just 1.24% that day.

The real rout arrived late Tuesday when executives gave an online presentation to the question. Clearly dissatisfied with the lack of visibility of Softbank’s Ingenuity option, THG shares plunged, sweeping the value of £ 1.6 billion just an hour before the market closed.

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THG boss Matt Molding relinquishes his stock power to calm investors

Source link THG boss Matt Molding relinquishes his stock power to calm investors

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