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THG shares plunge after investor presentation

10/12/2021 | 02:32pm EST

(Refiles to remove extraneous word from headline)

By Abhinav Ramnarayan and Julien Ponthus

LONDON (Reuters) -Softbank-backed online retailer THG lost over a third of its value on Tuesday after it held a presentation for investors that had been intended to reassure the market it could reverse a recent share price slide.

The stock fell suddenly in late afternoon and closed down 34.75% at 285 pence. The stock has now lost close to 60% since September, having listed last year when it sold shares at 500 pence each.

No clear single trigger for the sudden selloff was apparent and the company didn't immediately reply to a request for comment.

"What I think has prompted the selloff is a number of different factors," said Susannah Streeter, an analyst at Hargreaves Lansdown.

She listed profit warnings in the online retail sector, rising interest yields denting the appeal of growth companies and the planned spin off of THG's beauty arm.

"There are reports as well 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 lay out its ESG strategy at Tuesday's capital market day.

But it ended the day as the top loser on the London Stock Exchange after recording its worst ever day in its one-year trading history.

THG last year completed what at the time was the biggest London stock market debut by market cap since Royal Mail in 2013. The deal netted the company 920 million pounds while shareholders, led by founder Matthew Moulding and private equity group KKR shared gross proceeds of 961 million pounds.

KKR sold its entire shareholding in the listing.

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

Several companies that listed in London 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 both trading well below their list price.

In May, THG raised $1 billion in new equity, including $730 million from Japan's Softbank Group. It also said it planned to spin off its THG Ingenuity platform into a separate company, and that Softbank had an option to inject a further $1.6 billion into Ingenuity once that was done.

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

ę Reuters 2021
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