THG PLC (LSE:THG) shares slumped in Tuesday’s early deals as the world’s largest asset manager reportedly ditched half its shareholding via bookrunner Goldman Sachs (NYSE:GS).
Blackrock has sold 58mln shares at a discounted price of 195p, according to a Financial Times report.
The transaction reported in the press has yet to be confirmed via London’s regulatory news service (RNS).
“For a while THG was a stock market darling with investors clambering to own the stock in the belief it would play a key role in helping product manufacturers sell direct to consumers. Now it is losing fans at an incredibly rapid rate,” said Russ Mould, investment director at AJ Bell.
“The backlash against THG seems to centre on the fact that people bought into the hype without paying attention to valuation.”
Blackrock was the largest external investor in THG PLC (LSE:THG) holding around 9.55% of the company prior to the reported £113mln transaction, behind founder Matthew Moulding who owns around 22% of the shares.
The valuation of the under-fire protein and make up retail group - or would-be e-commerce tech stock – has been heavily scrutinised in recent weeks as investors are increasingly concerned about a lack of traction for its tech-arm, Ingenuity, which seeks to partner with major brands to facilitate the e-commerce operations.
A capital markets event in October left institutional investors and analysts confused over its prospects, and, chief executive Moulding has subsequently seen his role in the company squeezed.
THG later committed to appointing a non-executive chair and said it would split the responsibilities held by Moulding.
Softbank, the Japanese tech financier that has heavily backed THG and Ingenuity, will also see its managing director take a seat on the board, in part to reassure over its commitment to the business.
Reassurance may be harder to find as Blackrock sells down its stake in the ailing group.
Russ Mould today highlighted: “Now that difficult questions are being asked about costs and more, particularly if the business is broken up into three as per the suggestion from THG, investors aren’t getting the answers they want – or they are not liking what they see."
In London, THG shares were down 5.89% trading at 204.6p in early deals.