Member Info for danl90

Some of the middle are own brands

Grow Gorgeous and Christophe Robin are especially good as they are actual brands and products we own

These and ESPA, mio, Perricone MD we do the whole thing for but own the whole thing

85% GM said on the update call

Lookfantastic is just a retail website we own and margin is 45-50% but we carry inventory risk

You’re better adding in a “brands” section too

Kallu, im buying for the gf regardless. I’m buying protein regardless

Why would I not buy from THG?

Also it’s same as you shopping at Primark. You shop where you suit and you probably look great in Primark

Wow. Trying to change the convo and make this a bit more light hearted has really failed

Some people are very scared here

Wait you think I think it actually makes a difference? It’s a big of fun. I’ve said that. But you’re reading it as literal

But tbh every little helps. This should be a 3x revenue business so you spend £100 and you can add £300 of value

Aligning investors and shoppers is not uncommon. A “points” scheme is arguable another mechanism. You’re transferring some shareholder equity into loyalty

Well don’t just be a leach here. Get the wife something nice from THG

@oxford. What for a bit of fun between us as investors share some ideas of what you could get from THG for a major calendar event which you will be buying for?

If you think it’s a bad idea you clearly aren’t as clear on the business here if you’re investing in THG but then “go shopping” for a perfume

You do know what THG does right?

It’s a factual point. It’s builds a loyalty with a customer base or employees hence why companies issue stock to employees

“ Now you are claiming nobody is aware of the products you have put your money in?”

I haven’t said this. THG issues data on active customers so we know exactly how many customers. Does ABF or Shoe?

No. Actually shoe has done online just to find those same customers are store customers (as returning to store) so that’s a doubling of cost based on poor customer data and insight

One of the main reasons companies list is that you can grow an awareness with your customer base

Ever heard of the Co-op

If I can get something for the gf why would I not get it from THG?

It’s a bit of fun. Take it as it is and stop being miserable

Buy stuff for gf/ wives/ boyf/ mistress for Valentine’s Day

This stock needs a solid Q1 update so help your own cause and buy from a THG or Ingenuity website

I spent £100 Lookfantastic yesterday and £60 MyProtein so do your bit too!

Posts below

I’m not so sure we hear anything tomorrow

Nothing more has leaked today

Tens of millions? Jeez I hope you’re wrong!

I’ve done my bit this weekend

Gf valentines present sorted from Lookfantastic and I’ve bought £60 worth of myprotein stuff

Try the flav drops. Awesome use them in fage yoghurt with protein powder and oats.

“ How are Boo's numbers a comparative disaster

THG hasn't yet reported an annual profit ffs”

Both have just reported trading figures for Christmas and both gave Adj.EBITDA

So they have given the same although the difference is then

One pulled guidance for next year on revenue and the other held its guidance

One then guided to a lower EBITDA and to view that as the level for the short to medium term. The other then bridged back to how it sees it’s margin restored and the steps to take

The difference is in the guidance

Well that’s exactly the point guys. You haven’t bought the business you’ve bought a brand and revenue stream that’s entirely supported by what would be a third party

For a trade bidder that’s an absolute nightmare as you buy things for the synergies ie you’d lay that into your infrastructure (like what THG beauty does it lays it all back into ingenuity)

As a trade buyer you’d be paying for your own existing infrastructure and rather than scaling that you’d have a massive contract with ingenuity so double costs

That’s just nuts for trade.

“ You know its exactly what mm was doing anyway talking about splitting them up and listing them so what's the difference” because it was via IPO and not trade. Trade looks for synergies. IPO investors don’t as they don’t have a pre existing asset and platform

“ 1. Help the product into the new owners wider audience and 2. Develop and expand the ‘brand’ with clever marketing / advertising” this is literally what ingenuity already does and SELLS bit of a crappy endorsement if we have to spin out a division to accelerate these two trades as this is the sell for ingenuity

Guys you’re thinking too plain. Different buyers different objectives. Trade buys very different to PE and usually can pay higher as they can get the synergy. Given that nutrition is not with any infrastructure of its own the buyer would either 1) not be interested as it won’t pay too much cost or 2) take from ingenuity entirely as they already have an existing platform in certain geographies ie if I was Metrex (the biggest nutrition brand in USA) why do I need ingenuity in the USA? Answer is I don’t.

THG can’t sell any of its businesses to trade as all the businesses run through ingenuity. Ie nutrition is entirely serviced end to end by ingenuity

All they could sell to trade is brands and the products but the businesses can’t be sold

You can’t sell half a worker who helps ingenuity in the morning and nutrition in the afternoon. Same for a warehouse. IT systems. Etc etc

@oxford, that’s a premium for control

But my point was is that £5 per share is based on a valuation of the business on IPO day

That’s the day we are referring to and it’s in black and white in a document that’s vetted by (I think) 8 investment banks and will be three sets of very expensive lawyers

The valuation of a company is share price x number of shares. You think that is low. Then take it over for 95p when it’s 60p. That’s your prerogative

In that example there were clearly enough sellers who believe that to be fair value and all their future value as they sold. Also no one else though it too low of an offer as it wasn’t beat

It’s like an auction of a watch. It sells for £100k but the second highest bid was £90k. Is the watch worth £100k? No as that bidder has it. He’s could now get £90k as that’s the market without him

Also re the board. It’s hardly independent

It’s management (Matt with golden share, Iain mc is a long time friend), SoftBank and sofina

Then there’s a few audit people and Zillah is not really independent

Norty the plan you mention is the current plan. Beauty is already on a spin out and will minority IPO

@common trade buyer can’t spoil the party as Matt has his Golden share. You can’t even get a seat at the table

So it depends on Matt. If he’s wedded to one deal (like barbarians at the gate) then the door is shut to everyone else

Also the new cash wouldnt be existing holders. It would be the new PE

The shareholders I mentioned bar SoftBank were all in pre ipo and permitted to hold private stock. That’s why they are matts mates

But it’s just a statement of fact. Today the business has a value of (share price x no of shares)

If you think the output of that equation is too low buy the shares. If not don’t

But it being £5 or £50 on admission is just a output of the equation above. You can list the shares at a 1p if you wanted

Like I said £40m were the ipo fees. There’s a fair bit of work done for that. It’s not just roll up and each ticket is a £5er

Matt and concert party are c.25% of the shares (IPO doc has this at 28% if the option exercises which it did and then knock a bit off for the softbank raise dilution)

Sofina are 9%

Balderton are 10%

Merian I’m unsure. Ipo doc has them at 9% but they say they added after Sep and there was no RNS? Unless they didn’t cross a 1% and therefore the add was small so still 9%

SoftBank is 7%

This is 58% of the shares. You’ve £100m or so net cash on the balance sheet

A 596p share price is a £7.2bln valuation which is high given where nutrition is atm (will pass but short term it’s ugly)

But that means if all the “mates” of Matt roll then you only have to write a £3bln cheque which given SoftBank are standing buy with £1.4bln seems easy

The business then splits. Ingenuity plugs into advent and Leonard greens portfolio business and accelerated and then they can all relist in the US

Upsetting for us as that will be a big cherry we miss out on but that’s the benefit of having the big money

@poker well if you’ve making up your own meanings for things then you’re right

But in the real world you’re wrong

Mcap is the valuation of the business plus or minus the cash debt.

https://dl8hes3yo0qpy.cloudfront.net/wp-content/uploads/2020/09/10153258/THG-Prospectus-1.pdf

Pg32 of THG’s own admission document shows a market cap after fundraise of £5.4bln which is also known as the post cash valuation. So the pre money valuation is £5.4bln less the cash raised for the business (£900m) so c.£4.5bln

That’s the VALUE of the business. If the share price was to be £50 a share they would have just split the stock 10% of what they did. If they wanted the share price to be 50p they would have split the stock an extra 10 times

But the value funds were buying in at was £4.5bln and then they funded the company and extra £900m

£5 is just what falls out at the bottom. You can start the share price at whatever figure you want. But too high and squash liquidity and too low you risk wild swings

When people value you a business you value the business and then divide by number of shares. Your way suggests that somehow you can do that backwards? Every business has a different number of shares in issue

During an ipo you don’t really know the share price until a few days before. All funds say is “like it and put me in for £20m at a value of £x and £y. If it’s higher than that range I’m out”. Then the bookrunner finds the right total valuation in that (that the book is full but you push enough out so you get a day 1 “pop”). At that point no one knows or has a care that £5 will be the price of the share

That just comes out in the wash as the trading desks advise on liquidity

@poker that’s wrong of course £5 is a valuation.

£5 times no of shares in the market is the valuation

Some investors come in as they like the value and some don’t as they don’t

£5 isn’t just a nice round number to kick things off that’s the value the bookrunners and investment banks guided too and then filled the book at

They then charged £40m for that. So to say £5 is just a number to get started seems a waste of £40m!

I know this as I’ve done a few IPOs. Funds work off the valuation the share price falls out after once you guide on liquidity