(Alliance News) - THG PLC shares were slightly higher early Wednesday, as the e-commerce firm battles a wave of selling that sent the stock tumbling by 35% on Tuesday.
THG shares were up 0.8% early Tuesday at 287.20 pence. The stock has dropped by 64% so far in 2021. THG listed in September 2020 at 500p per share.
Better known as The Hut Group, the company on Tuesday held its first capital markets day since it listed in September 2020.
The meeting was meant to reassure shareholders after a tough month for the firm's share price. But instead it spooked them. The drop started at around 3pm on Tuesday afternoon.
THG before the market open on Wednesday noted the share price fall and said no material new information was disclosed at the event.
The company stressed that it has "consistently" delivered ahead of its targets since floating in September last year, including a "strong first half performance across all divisions".
"The group also has a very strong liquidity position as it enters its peak trading season," THG added, with GBP700.00 million available to it.
THG said it will provide a third-quarter trading update on October 26.
"The unprecedented decline in THG's equity during yesterday's Capital Markets Day clearly indicated that the market took little comfort from the investor event, which contained less financial detail than hoped," commented Davy Research.
"The forthcoming trading update now takes on greater significance – with heightened focus around the Ingenuity sales ledger and broader disclosure," Davy added. "At the current share price, the market-implied valuation of THG Ingenuity is close to zero."
Ingenuity is THG's e-commerce technology platform. Japan's Softbank Group Corp has an option to buy a 20% stake in Ingenuity for USD1.6 billion. THG will then explore an IPO or another structural option for that unit, "with the objective to maximise value for all shareholders", it has said.
Last month, THG also announced plans to spin-out THG Beauty as a separate listing in the first half of 2022. THG Beauty is the company's biggest unit by revenue and includes brands such as ESPA and retailer Lookfantastic.
In the first half of 2021, THG's revenue grew 42% year-on-year to GBP958.8 million from GBP675.7 million, but its pretax loss widened to GBP81.3 million from GBP49.9 million.
By Tom Waite; thomaslwaite@alliancenews.com
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