THG, the prominent e-commerce platform and technology provider, has pointed fingers at hedge funds for orchestrating a targeted assault on its stocks, leading to a notable decline in its share price. To substantiate its claims, the company, which operates multiple international websites, has furnished the Financial Conduct Authority (FCA) with supporting data. This information allegedly includes proof of irregular trading in the stock market and instances of short-selling subsequent to a negative response to THG’s capital markets day in October. This adverse reaction resulted in a staggering £2 billion drop in THG’s market value.
During its capital markets day, THG organized a meeting with investors to address apprehensions surrounding the profitability and business model of its white-label technology division, Ingenuity. However, despite these efforts, THG’s share price witnessed a sharp decline, plummeting by more than 77% within a span of just one year. Even with allegations of a coordinated attack, THG’s shares continued to spiral downwards on Monday, experiencing an additional drop of nearly 8%. A source closely associated with THG claims that this particular fall was a consequence of intentional “sell” orders intended to trigger automated trading algorithms.
THG’s submission of evidence to the FCA was prompted by a formal request from the regulatory authority. This request came subsequent to Numis, the firm that assisted with THG’s £5.4 billion listing, reporting itself to the FCA in November. The submission comprises data supporting THG’s accusations against the hedge funds.
There has been recent speculation regarding the prospect of THG reverting to private ownership under its founder. The company’s struggling share price has kindled hopes among investors for a privately-backed buyout. However, THG, the FCA, and Numis have all refrained from commenting on these rumors.
As the investigation into the alleged coordinated attack on THG’s shares progresses, the company continues to confront significant challenges in rebuilding investor confidence and stabilizing its share price. Moreover, the outcome of the investigation could potentially have broader implications for the regulation of hedge funds and their activities within the stock market.
Useful links:
1. Financial Conduct Authority (FCA)
2. THG Official Website
