What Went Wrong at Hut Group?

What Went Wrong at Hut Group?

It’s been a dramatic period for investors in The Hut Group (THG). The health and beauty e-commerce site was the largest float on the London Stock Exchange last year, and the biggest since 2013. But it has fallen from grace spectacularly in the last few weeks. After a strong start as a public company last year, it’s all been downhill in 2021, with a brutal 75% fall this year. The firm’s founder and chief executive Matthew Moulding now says the London IPO was a mistake. What should investors make of this remarkable turnaround?

THG's shares floated at 500p to great fanfare in September 2020, rising 25% on the first day of trading. After the Covid-19 crash, the successful float was seen as a vote of confidence in UK listings, especially as THG was an e-commerce company--and one that UK plc conspicuously lacked (the Deliveroo float was still to come).

THG was described at the time as a “unique asset” by one fund manager and others as proof of the UK’s tech leadership. Japanese investment vehicle SoftBank, of WeWork fame, took a near 10% stake in The Hut Group in May 2021, enticed by The Hut Group's tech platform, which is called Ingenuity.

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