Shares in The Hut Group crashed to a new low as its largest institutional investor dumped almost half its stake.
On another bleak day for founder Matt Moulding, Blackrock offloaded 58m shares in the online retailer for just 195p each, or £113million.
That was 10 per cent below the closing price on Monday and a far cry from the peak of almost 800p reached early this year and its listing price of 500p.
On another bleak day for The Hut Group founder Matt Moulding (pictured), Blackrock offloaded 58m shares in the online retailer for just 195p each or £113m
The shares fell 9.2 per cent, or 20p, to 197.4p. Before the sale, Blackrock was THG’s largest institutional investor with a near-10 per cent stake.
Only Moulding’s 14.2 per cent holding was bigger. It is now the sixth biggest shareholder.
Blackrock invested before it went public so it is not clear if it made a loss or gain on the sale. The deal was described as ‘prudent risk management as the stock has fallen’ by a source close to Blackrock.
Russ Mould, investment director at AJ Bell, said: ‘Asset managers rarely sell after a stock has already fallen so much unless they’ve lost all confidence in the business and/or found something that completely changes the investment case.
‘The backlash against THG seems to centre on the fact that people bought into the hype without paying attention to valuation.’
THG has three main business lines. The Beauty arm sells skincare and make-up and includes brands such as Lookfantastic.
The Nutrition arm is home to Myprotein and Myvitamins, and the Ingenuity tech platform specialises in ecommerce services such as websites.
Ingenuity has been in the spotlight after THG granted funds linked to Japanese investment titan Softbank an option to buy a 20 per cent stake. That arrangement valued Ingenuity at a whopping £4.5billion, a figure that raised eyebrows in the City.
With mounting concerns over its true valuation hitting the share price, Moulding last month held a capital markets day to explain more about Ingenuity.
But the presentation backfired, and shares fell 35 per cent in two hours.
The stock has continued to fall and THG was valued at just £3billion last night.
THG was founded by Moulding, 49, in 2004 when he began selling CDs online.
To assuage worries that he has too much power, Moulding will sacrifice his ‘golden share’ that gives him a greater say than other investors and a veto over takeover bids.
It has hired a recruitment firm to find an independent non-executive chairman – as Moulding is chief executive and chairman.
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