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Value questions

THG slumps as Blackrock dumps shares

Sir Tom Hunter

Shareholder: Sir Tom Hunter (pic: Terry Murden)

Shares in THG fell to an all-time low last night after it emerged that its largest shareholder Blackrock sold half of its stake in the online retail group.

Blackrock offloaded 58m shares in the e-commerce retailer at a price of 195p each, valuing the deal at £113.1 million, according to its bookrunner Goldman Sachs.

The price represents a 10% discount to THG’s closing price last night and well below the 500p the company floated at last year and the 800p peak in January.

Shares in the Manchester-based group, which runs websites including Lookfantastic and Cult Beauty, closed at 197.6p, a fall of 20p or 9.2% on the day.


Scottish entrepreneur Sir Tom Hunter holds a small stake in the company after selling down his holding earlier this year.

Russ Mould, investment director at AJ Bell said: “For a while THG was a stock market darling with investors clambering to own the stock in the belief it would play a key role in helping product manufacturers sell direct to consumers. Now it is losing fans at an incredibly rapid rate.

“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.

“Now that difficult questions are being asked about costs and more, particularly if the business is broken up into three as per the suggestion from THG, investors aren’t getting the answers they want – or they are not liking what they see.”

Another analyst said questions were being asked over corporate governance as well as the shape of the business. “If the company splits into three it raises questions over where the value lies,” she said.

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