THG Founder Molding Gives Gold Share in Governance Overhaul
THG founder Matthew Molding has confirmed plans to drop his “gold stock” after the online retail giant’s shares plunged amid scrutiny of its corporate governance.
The company, which was previously called The Hut Group, currently has a dual-class share structure that allows the founder and CEO to have significantly greater voting powers than other investors.
The âgolden shareâ structure has been criticized by institutional investors who think it can give the founders too much control.
The structure of THG also previously prevented the company from entering the FTSE 100 under UK listing rules.
However, THG announced on Monday that it will now cancel special action rights and start its application process to switch to the premium segment of the main market of the London Stock Exchange.
The company’s board of directors said it also plans to launch a “deeper review” of its corporate governance.
Its renewed efforts to improve corporate governance come after the company’s share value fell nearly 50% in the past month.
The Manchester-based company, which owns e-commerce brands such as MyProtein and Lookfantastic, had seen investor sentiment fade after a critical report from researcher The Analyst.
The report expressed concerns about its technology platform Ingenuity and encouraged investors to sell short – let’s bet its stocks will fall.
THG hosted a capital markets day last week, giving the company an opportunity to allay its concerns, but the move backfired dramatically as stocks fell 35% on the day of the presentation. fearing that support for Japanese investment giant Softbank would cool off.
Mr. Molding said, âFollowing the anniversary of our registration in 2020, we believe the time has come to take this next step and apply to the premium segment in 2022, thus continuing the development of THG as we strive to implement our strategy for the benefit of our shareholders, key stakeholders and employees.
THG shares rose 3.4% at the start of trading on Monday.