RE: FT20 Sep 2022 18:32
Article in full
Incredibly, a price target cut from 380p to 45p isn’t the most eye-catching thing in a Liberum downgrade of THG. The even bigger drop comes on page six, where analyst Wayne Brown reports back from a management meeting post the retailer’s most recent profit warning:
On the media coverage of THG — CEO Matt Moulding recounting the following instance, which we reproduce verbatim. “I got a call from 1 of our advisers last week, really interesting call for me, a very senior guy and he was out for dinner with a very senior person in a well-known business newspaper. And THG actually came up as a conversation. And essentially, the story that came back was that, that media outlet had obviously received some phone calls around shortly after our IPO, suggesting that is as wrong as many people have said. And so as a result of that, that media outlet set up a war room, filled it with journalists and then spent the next 2 years trying to uncover anything possible about THG. And actually, the conclusion at that dinner was that actually we probably are all right, which is not a bad result because I believe they also discussed Mike Ashley and he has had 15 years and the people are probably just decided that he has obviously done an incredible job with his business. And so look, I think my view would be that’s probably a similar story. It’s quite unique in the UK market with the media that people can ring open and make claims against the company and war rooms are set up and then people spend 2 years putting the water right against you, but that’s just life, isn’t it? So we just carry on. We don’t change our strategy. We don’t change anything. We just keep on delivering to our numbers.”
For the avoidance of doubt, the Financial Times cannot be the “well-known business newspaper” that “set up a war room, filled it with journalists and then spent the next two years trying to uncover anything possible about THG.” It can’t because it didn’t.
The only journalistic co-ordination that exists here is a group chat. It’s a routine way to work on multi-day, multi-theme stories. Reporters tend to have dozens on the go. The THG group began in mid 2021 not because of tip-off phone calls but because the shares were threatening to go below the flotation price; a cautious tone of coverage was already well established.
THG’s newsworthiness since its IPO has diminished in line with its market value (down ~95 per cent). But because group chats are effectively unkillable while their subject remains active, this one has continued as a repository for gossip and stupid jokes:
And though it may seem an unlikely comparison for any company to actively invite, we should be clear: there’s absolutely no parallel here with other high-profile FT investigations. No air-gapped computers in windowless offices. No cross-continent gumshoe investigations. No covert operations against clandestine forces. There’s no THG reporting team at all, much less one that was given
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