over 3 years ago • 2 mins
Finally, signs of a pulse from the bedridden British IPO market: ecommerce company The Hut Group (THG) announced plans for an initial public offering on Thursday 📣
THG’s best known as an online retailer of health and beauty brands, but it also sells its ecommerce technology on to other companies 💻 And seeing as ecommerce has emerged from the pandemic with a spring in its step, now seems as good a time as any for the company to sell shares to the public.
As part of the announcement, THG revealed its revenue increased by almost 36% in the first six months of 2020 compared to the same time last year 📈 It also mentioned it’d be targeting overall revenue growth of 25% over the next few years. And given that the company put its valuation at just shy of $6 billion, this’ll be Britain’s biggest IPO since 2013.
Only seven companies have IPOd in the UK so far this year – the fewest since 2009. US and Chinese IPOs, meanwhile, have been booming, which could be down to a couple of factors. In the US’s case, it might be because its stock market is breaking records almost daily, while the UK’s hovers 20% below its peak 🇬🇧 That makes companies more inclined to sell shares – and hopefully get a higher price – in the States. As for China, it’s been benefiting from souring relations with the US: the country’s firms are “coming home” and IPOing on the Chinese and Hong Kong stock markets instead.
Turns out THG’s IPO will include an unusual feature: the company’s co-founder and CEO will get a so-called “golden share” that’ll give him the power to veto any attempt at a hostile takeover for three years 🚫 And since that means the stock can’t be included in the UK’s key index – and that investment funds which track the index won’t be forced to buy it – demand could end up suffering.
Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.