THG (LON: THG), formerly known as The Hut Group, has been something of a disaster for shareholders since flotation. As has been pointed out many a time Matt Moulding might be a great entrepreneur but he might not be wholly suited to the task of running a quoted company. Blaming short sellers for manipulating the share price down was considered by most in The City to be the height of naivety for example.
But that's not all that has been going on. The actual trading results have been a little less than as expected. The City will forgive people if they make money after all. So THG stock is well down from the flotation price, the big question all have is whether this is going to turn around. The answer to that is that of course it is possible, but will it actually happen? Don't forget, that flotation price was close to 800p, we're currently at a 90% loss from that number.
THG share price from London Stock Echange
The news on Thursday is just that the results will be published on 18 April - well, that's nice. Along with the announcement of a contract win for the Ingenuity platform. Now that might be of more substance. For much of the implied, or suspected, value within THG is not so much in its own direct sales as in the platform it has built which can then be rented, or leased, out to others who also desire to be selling online. This is what that tie up with Softbank was all about after all. So, a contract win for that platform goes some way to validating that idea. That having built the online selling platform it will be possible to use that as the base for the sales of new and other production.
This particular and specific deal is only a validation of the concept though. It's expected, once fully implemented, to add £150 million in GMV, which for a company already with £2.2 billion in revenue is some 5% or so. That's not a dial moving moment. It's an interesting validation of the idea of using the Ingenuity platform to expand, but not in itself a transformational deal. Thus, perhaps, the rather muted response to the announcement.
