The Hut Group (THG) founder Mathew Moulding has said he will give up his “golden” share of the company to regain the trust of investors.
The ecommerce platform hoped that the move would promote “good corporate governance” after the company’s share price dropped 25 per cent of its value in just two weeks.
The uncertainty was sparked by questions surrounding THG’s profitability, share structure and valuation.
The company said that the move will help it apply for a premium listing in London, which it hopes to achieve by 2022.
Currently, Moulding’s golden share means that THG is unable to apply for a premium listing and therefore not listed in the FTSE.
“After the anniversary of our 2020 listing we feel that the time is right to make this next step and apply to the premium segment in 2022, thereby continuing the development of THG as we endeavour to deliver our strategy for the benefit of our shareholders, key stakeholders and employees,” Moulding said.
Initially, Moulding’s controlling share in the company was supposed to give him ultimate control over the Manchester-based company for up to three years after it floated on the LSE in September last year, being valued at £5.4 billion.
The removal of the dual-class share structure will likely appeal to THG investors, whose holdings have dropped in value in the last month.
The news prompted the share price to jump 8 per cent on Monday morning after the announcement, however the shares will still 50 per cent lower than they were last month.
The company’s announcement that it was to separate its tech division, THG Ingenuity, from the beauty and nutrition arm that includes sports nutrition brand MyProtein prompted the share price to more than halve in value.
The lack of detailed around the profitability of THG divisions has prompted analysts to raise concerns about the company’s underlying profit growth.