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City comment: For THG, ignorance is bliss

·1 min read
THG founder Matthew Moulding, left, with Prime Minister Boris Johnson (PA Archive)
THG founder Matthew Moulding, left, with Prime Minister Boris Johnson (PA Archive)

Matt Moulding is in need of some advice — but don’t worry, I’m here to help.

The buff billionaire has had a torrid few weeks after the stock market repeatedly gave a thumbs-down to his plans at THG. Moulding wants to make his e-commerce company a platform business. Protein shakes and make-up — its early quarry — were only the start. Now he wants to use his buzzy tech to help other firms sell online. It’s just like Amazon: first books, then the world.

Investors aren’t buying it. They’ve sold off the stock at a rate of knots. The latest blow was yesterday’s fall of 21% — the second double-digit percentage dive in as many weeks.

I’ve noticed a pattern. These precipitous share price collapses happen when the firm shares details of the business. A capital markets event a fortnight ago sent shares down 35%. Yesterday’s dip came after a quarterly trading update and call with analysts.

Clearly, the solution is for THG to simply stop disclosing any details. And to boost the share price, why not retract statements? The less info the better.

Failing that, Moulding could bin the much-hated plan to spin out THG’s beauty and nutrition arms. The plans will leave investors who bought in just a year ago at IPO with the minnow platform, Ingenuity, and ungainly holdings in the two other divisions. The question many rightly ask is: why would they not just buy the beauty and nutrition division directly?

There’s no reason the platform business can’t grow within the larger holding company — after all that’s what Amazon did. Backing off the spin-out will be better for Ingenuity in the long run.

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