THG shares hit record rock bottom as BlackRock halves stake
Shares in THG have fallen to an all-time low today after it emerged that its largest shareholder Blackrock sold half of its stake in the online retail group after a difficult month.
Blackrock has sold 58m shares in THG at a price of 195p each, valuing the deal at £113.1 million, according to its bookrunner Goldman Sachs.
The price represents a 10 per cent discount to THG’s closing price last night and well below the 500p the company floated at last year.
Shares in the Manchester-based group, which runs websites including Lookfantastic and Cult Beauty, fell to a record low of 198p in early trading, and were later down 6 per cent at 204p.
THG is “losing fans at an incredibly rapid rate,” said Russ Mould, investment director at AJ Bell.
“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,” Mould said.
“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.”
THG shares have slumped in recent days because of concerns about the firm’s governance and the future of the business, after it flagged last week that profit margins would be squeezed by currency changes.
Analysts have also pointed to a slowdown in growth at its core beauty division.
