Sign up for free to receive the latest news straight to your inbox
THG, the Manchester online retailer, handed a case to the city’s regulator, the Financial Conduct Authority (FCA), which it says shows hedge funds and stock brokers plotting to lower the price of its action.
The FCA is investigating the trading of THG shares following a massive drop in its market capitalization late last year.
Last October, THG shares fell more than 30% immediately after founder Matthew Molding spoke about the potential of THG’s new e-commerce platform, Ingenuity, on a capital markets day. .
The collapse was attributed to skepticism about the lack of granular financial details provided on the unit.
The group saw its market capitalization drop by £ 1.85 billion. However, the fall in the share price continued.
THG floated in September 2020, at 500 pence per share, rising to nearly 800 pence early last year, the city’s largest listing since 2013, when its market capitalization approached £ 10 billion.
Today, its shares are trading at 189.20 pence a share, valuing the company at around £ 2.31 billion.
THG’s filing contains details of irregular stock markets and short selling, where investors are betting on falling stock prices, which Molding says shows collusion against the group.
A source close to THG claims that the decline in stocks is due to a coordinated effort to sell stocks in order to trigger automatic trading algorithms that cause stocks to fall sharply, according to the Financial Times.
The FCA investigation includes City of London stockbroker Numis, which was one of the investment banks that launched THG’s initial public offering in 2020.