Another ST article by Oliver Shah30 Jan 2022 00:07
Title - What’s really eating THG’s Matt Moulding?
"A sometime customer of THG’s Ingenuity e-commerce platform got a shock last month. He had been due to speak at an online conference to compare Ingenuity with competitors such as Magento and Shopify. These offer branded goods companies plug-and-play systems for selling products direct to consumers.
A week or so before the event, he received a clumsily worded email from THG’s legal department warning him against appearing. It argued that he lacked the expertise and knowledge to discuss Ingenuity properly. The individual was baffled: not only did he have a long track record in his industry, he was going to be positive about Ingenuity. He decided to comply — he was busy, and had “better things to do than fight”. But the email left him wondering about the true state of the company.
“I was a fan and they turned me into someone who’s saying, ‘These guys are paranoid,’ ” he said. “I was about to contact them about another business. They’ve lost a potential client.”
THG denied trying to dissuade any customers from talking about Ingenuity.
Shares in THG, formerly The Hut Group, have been in a downward spiral since research firm The Analyst issued a brutal “sell” note last October. Having popped after their float in September 2020, the shares have shed three-quarters of their value and closed on Friday at 126.5p. THG’s market capitalisation of £1.7 billion compares to £5.4 billion in 2020. Last year, it crossed £7.25 billion — a level that unlocked an £830 million share-based bonus for its boss.
Matt Moulding, THG’s gym-bunny founder and executive chairman, has blamed the collapse on a shadowy network of analysts, banks and offshore hedge funds. Last November, he suggested these were operating “in tandem” to drive down THG’s stock and benefit via undisclosed short positions. The same month, broker Numis, which worked on THG’s float, apologised for a note sent to clients by a junior salesperson saying that it had “accounting irregularities”. And last month, THG handed a dossier to the City regulator drawing attention to what it claimed was suspicious trading activity — particularly during its investor day on October 12, when its market value plunged by £2 billion in a matter of hours.
Even Moulding’s mother has joined the debate, saying that her son has produced “outstanding results” but “it’s still not good enough” for some journalists.
Amid the drama, THG’s behaviour has raised eyebrows. That legal threat was far from an isolated incident. THG is understood to have used law firm Harbottle & Lewis to send aggressive letters to critics. The actions prompt two questions. Does THG have something to hide? And wouldn’t Moulding be better off proving the doubters wrong by making sure the business outperforms?
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