Member Info for HypeHero

Give them a chance, half of the world is not back at work yet and the half that is... its only day two.

If you like tin hats you might say all of this was done when it was for good reason. And by good reason I mean strategical reasons that benefit those doing the plotting.

There is a difference between the EV and the share price. I have never before seen it stated that the efficient market hypotheses (note - hypothesis... clue is in the name) is accurate at all times. Let's not be disingenuous there are plenty of SPs that have moved around over many years without any material change in the underlaying business.

Now that THG has 1.322 billion shares in issue, with Nutrition and Beauty as the main divisions post-demerger, we can take a stab at estimating a fair value per share. Using typical online retail multiples—1.0x–1.5x revenue and 12x–15x EBITDA—combined annualised revenue of £1.662B and EBITDA of £105M puts the enterprise value (EV) in the range of £1.5B–£2.3B. After deducting ~£201M in net debt, the equity value comes out at £1.299B–£2.099B. Spread across 1.322B shares, that suggests a fair value per share somewhere between £0.98 and £1.59, depending on where the market prices them. Obviously, a lot depends on sentiment and sector trends, but it feels like a reasonable ballpark!

That is the EV though, what the SP does is down to other factors like interest, sentiment etc.

We need to see the real, transparent numbers as I have had to do a bit of educated guessing.

But it works out based on standard metrics between just over £1 and £1.50 per share at the current voting rights.

My person view is the price is sentiment based and the saying about voting and counting machines comes to mind.

I've just put an order in for an amount. Bit of a punt but its rude not too at this price vs my assessment of what fair value will look like.

I do think there is a potential misunderstanding of the industry here though. Nobody, especially at the back-end of Christmas is actively watching a small company like THG and trying to work out a value play. They will take notice with the first transparent (i.e. not deduced by us interested parties) and will likely wait for a quarters confirmation or two before rating what the value play is.

Feel free to provide an assessment (including workings) of what remain co is worth fair value as a business.

So, it is unusual to retain the shares for such a long period and one has to assume it is being done for strategic reasons. That strategy being business or otherwise.

One option is for flexibility: Keeping the shares active could allow THG to use them for internal equity adjustments, financing or reallocation in the interim period.

Another option is by delaying the removal the company can stagger market adjustments. Why they would want to do this I do not know...

Another option is tax and accounting benefits. I don't have a deep knowledge of this area but there may be some motivations in this area to consider.

I am perplexed but also waiting for the dust to settle and for the market to get back into BAU before considering things too deeply.

I question the legitimacy of your posts but here we are...

Why can people not have their own opinions - this is not North Korea?