Why The Hut Group looks set to remain in the doghouse with some investors | Business News

The flotation of The Hut Group – now rechristened THG – in September last year was the biggest of 2020 on the London Stock Exchange.

At the time, it spurred a great deal of optimism, coming as it did in the middle of a period in which the UK was grappling with COVID-19.

It also raised hopes that the London stock market could be as much of a crucible for technology stocks as its counterparts in the United States and continental Europe.

Fuelling that was the fact that, despite several eyebrow-raising features about the company’s listing, the shares got off to a day one premium.

Those features included the fact that Matthew Moulding, the founder, was both chairman and chief executive of the company – an arrangement usually frowned upon in UK listed companies.

Some investors disliked an incentive scheme under which Mr Moulding stood to make as much as £700m and also the fact that he had a controversial “founder’s share” that gave him the ability to block takeover bids for the next three years.

Such arrangements are commonplace in the tech-friendly US markets but not in the UK.

For a while, Mr Moulding appeared to have seen off the sceptics.

Shares of THG, which came to market at 500p each, soared to 658p on debut and went on to hit the dizzy heights of 837.8p each in January this year.

Shortly afterwards, in May, Mr Moulding announced that Softbank, the specialist Japanese tech investor famous in this country for its takeover of chip designer Arm Holdings in late 2016, was investing $730m as part of a $1bn fund-raising.

That announcement was accompanied by news that Softbank had been awarded an option to buy 19.9% of THG Ingenuity, the part of THG that provides integrated ecommerce and logistics services for customers such…