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THG has handed over data to the financial regulator seeking to show it was at the centre of a coordinated attack from hedge funds and stockbrokers that led to a recent slump in its share price.
The documents contain what the e-commerce firm believes to be irregular stock market trading and short-selling data, particularly after a disastrous capital markets day in October that wiped off £2bn of its stock market value.
At the time THG held a meeting with investors to offer more clarity about its white-label technology division, Ingenuity, amid City concerns about its profitability and business model as well as wider good corporate governance at the group. However, the meeting backfired and the shares slumped by a third.
A source close to THG claimed the fall was due to co-ordinated sell orders designed to trigger automated trading algorithms that sent the shares tumbling, the Sunday Times reported.
THG’s submission comes in response to a request from the Financial Conduct Authority (FCA), sources said, after Numis, which worked on THG’s £5.4bn listing, reported itself to the financial regulator in November.
Numis swiftly apologised and retracted a bearish note, written by a junior member of staff, suggesting that there were “irregularities in accounting” at THG. Numis has not had any dialogue with the FCA since, sources said.
In an interview with GQ magazine last November, chief executive Matthew Moulding said THG had suffered a “pretty aggressive short attack” orchestrated by the “media, investment banks, fund managers, hedge funds, etc”. The co-founder was at one point in line for a share-based bonus of £830m.
THG, previously known as The Hut Group, is also understood to have included information about research outfit The Analyst, which published a sceptical research note in October and recommended shorting THG shares.
The Analyst, which did not reply to a request for comment, reportedly approached THG for comment multiple times prior to publication of its content. In December the firm pulled its short recommendation.
According to data provider IHS Markit, 4.1pc of THG’s shares are on loan, so-called short positions that allow investors to profit from a drop in the share price.
The shares closed at 194p on Friday compared with highs of almost 800p this time last year.
THG, the FCA and Numis all declined to comment.