THG Founder Wishes He Had Never Listed in London

(Bloomberg) —

The founder of THG, a retail and e-commerce firm that has seen its shares hammered in recent months, regrets the firm’s London IPO and wishes it had listed in the U.S. instead, according to an interview with GQ. 

Matt Moulding, 49, said the time since the Softbank-backed firm floated in September 2020 had been “the worst period ever” and that he wouldn’t have gone ahead with the offering in hindsight.

“There are scenarios where if you’re not an individual leading a big company, then I think the U.K. market can work really well,” he said. “But there aren’t any examples, I don’t believe, where an individual brings a big company to a public market and it can go well, certainly as you get to a certain scale anyway.”

Formerly known as The Hut Group, THG has lost nearly three quarters of its market value in 2021 as analysts raised concerns over the growth outlook for its e-commerce platform Ingenuity, used by third parties to sell goods. Worries about corporate governance have also weighed on the firm, which operates online shops for things like beauty and nutrition products.

Moulding reiterated his belief that a shortseller attack was partly to blame for the company’s 69% drop in share price in the last two months. Shortsellers borrow shares in companies and sell them on, with the hope of making gains from falls in the company’s stock price. 

Around 1.4% of the company’s shares were out on loan on Friday, down from 4.1% earlier in the week, according to data from IHS Markit. The proportion of shares on loan is an approximate barometer for short interest in the company. 

“You wouldn’t rob banks any more, you’d just do short attacks, you can get away with it, it’s legal” Moulding told GQ. “They bet on the share price falling, ahead of doing some activities. They do their activities and then they make a lot of money when the share price falls.”

Founded by Moulding and John Gallemore, THG started off selling CDs but now offers beauty and skincare products and health food across hundreds of websites, as well as the Ingenuity platform. The company floated last year at 500 pence a share. In May, SoftBank struck a deal with THG for the right to buy a 20% stake in Ingenuity for 1.6 billion pounds ($2.2 billion), valuing the division at about 4.5 billion pounds, greater than the entire group’s current market capitalization.

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