The Hut Group has seen its share price plummet to record lows wiping billions off its value as the company goes ahead with plans to separate its different business arms.
THG, which owns a raft of ecommerce brands like Myprotein, Lookfantastic, Glossybox and Illamasqua, has seen its share price drop by over 20 per cent in the last five days alone.
The recent sell off, which saw major investors including Goldman Sachs, The Capital Group and Deutsche Bank offload hundreds of millions of pounds worth of stock, has seen THG’s shares drop below £5 for the first time since it went public last year.
This marked the culmination of a three-week decline which has seen THG shares drop by around a third, wiping £2.7 billion off of its total value.
READ MORE: Homebase enlists THG to “significantly fast-forward our digital plans” and transform its online operations
According to City analysts, THG’s share sell off comes as the company pushes ahead with plans to split its ecommerce and THG Ingenuity, which provides technology to third party retailers like Homebase and Hotel Chocolate.
One investor told The Mail: “At the end of the day, THG is an M&A vehicle for e-commerce businesses. Things have gone a bit quiet on that front and it has some way to go on building the technology business, which it is now saying it wants to separate into this brilliant new entity.”
Numis’ director of retail research Simon Bowler, one of the few to predict the sell off, said that wider pressures on the ecommerce industry post-pandemic and a lack of transparency about the future of THG Ingenuity were also factors leading to the drop in its share price.
Another anonymous source speaking to The Mail said investors scrambled to invest in THG when it floated last year and the high street was in dire straits, however “ecommerce is getting a kicking at the moment and people are having a second look at what they’ve bought into”.