The Hut Group share price collapsed to a record low as the outlook for the company dimmed. THG crashed to an all-time low of 37p, meaning that it has fallen by more than 98% from the highest level on record. This means that the company has now become a penny stock, in one of the biggest implosions in the United Kingdom.
THG PLC, formerly known as The Hut Group, was once a crown jewel in UK’s tech scene. Indeed, when it went public in London, it was the biggest IPO in almost a decade. Since then, the company has been in a downward trajectory as demand for its products remained under intense pressure. Investors also worried about the company’s profitability.
The THG share price tumbled last week after the company published mixed financial results. In total, the company’s revenue rose by 12% to 1.07 billion in the first half of the year. This growth was helped by a 21% increase of its Ingenuity business and a 20% increase in its Beauty business. THG Nutrition, which owns MyProtein saw its revenue rise by just 1%.
THG ended the first half of the year with ample liquidity. It had 226 million pounds in cash and 170 million in undrawn RCF. It expects to end the year with 550 million in cash. At the same time, the company’s Ingenuity brand has continued doing well as it attracted 7 of the biggest 20 food and beverage companies like Mondelez, General Mills, and Nestle among others. The number of websites it manages has increased from 133 in Q2 of 2021 to 212.
The daily chart shows that the THG stock price has been in an overall downward trend in the past few months. It has crashed below all moving averages and the important support level at 70.77p, which was the lowest level on March 7. The Awesome Oscillator has dropped below the neutral point.
Therefore, The Hut Group share price will likely continue falling as sellers target the next key support level at 30p. A move above the resistance point at 45p will invalidate the bearish view.
This post was last modified on Sep 21, 2022, 09:13 BST 09:13