Hut takes off after stock market debut: Rise in online retail group’s share price makes founder Matthew Molding a billionaire
The Hut Group has grown tremendously on its stock market debut and immediately inflated the fortunes of its multi-millionaire backers.
The online retail empire was listed on the London Stock Exchange yesterday morning at a price of 500 pence each.
But the stock shot up immediately and by the end of the day it was up 25 percent at 625 pence.
In the money: Hut Group founder Matthew Molding pictured with wife Jodie became a billionaire yesterday after his online retail empire was listed on the London Stock Exchange
Enthusiastic traders added more than £ 1 billion to the value, while the market cap increased from £ 5.4 billion to £ 6.8 billion. The initial public offering (IPO) had already generated a fortune for The Hut’s backers.
Founder Matthew Molding, 48, didn’t sell any stock during the IPO, but his 17 percent stake is now worth £ 1.2 billion.
Sir Terry Leahy, the former Tesco boss, made £ 17m from the sale of 3.4m shares during the IPO for 500p. His remaining 13.6 million shares are now worth £ 85 million.
Oliver Cookson, the entrepreneur who founded the food brand Myprotein and sold it to The Hut in 2011, made £ 283 million during the float, on top of the £ 58 million he made from selling his business nine years ago. He now has a stake of £ 62.5 million.
The Hut Group
- 500p Hut Shares Price Upon Listing
- £ 5.4 billion Value of Hut at the start of the day
- 625p Price of shares last night
- £ 6.8 billion What Hut is now worth
- £ 1.2 billion Value of Founder Matt Molding’s Commitment
- £ 85 million Value of Sir Terry Leahy’s stake
Former Debenhams boss Terry Green had made £ 6m and now has £ 15.4m left.
And West Coast Capital, the investment firm of Scottish entrepreneur Tom Hunter, has sold £ 52.5 million in shares, but still owns £ 119 million.
The dramatic first day of trading signaled a vote of confidence in The Hut’s prospects, despite concerns over The Hut’s governance and governance.
Molding said, “I am delighted that The Hut Group has received such strong support from some of the world’s largest investors, which means that we have been able to deliver a very successful stock offering in the company.
“The results of the offer are a clear validation of our business model, significant growth prospects and recognition of the hard work and talent of all our colleagues.”
The company owns makeup website Look Fantastic, brands like Eyeko and nutrition line Myprotein. It also owns two luxury hotels in Manchester and The Hale Country Club and Spa in Cheshire, popular with footballers’ WAGs.
But investors are particularly interested in the online shopping technology, which it licenses to companies like Asda and Tesco. Traders’ enthusiasm was boosted by the long dry spell that the stock market suffered during the lockdown.
The Hut float was the largest e-commerce IPO ever in Europe and the largest technical IPO ever in London, according to the London Stock Exchange. But the company has been criticized for failing to comply with basic corporate governance rules.
Every little bit helps: former Tesco boss Sir Terry Leahy is a shareholder
The molding has retained a ‘golden share’, making it a heavy influence. He also becomes CEO and Chairman, and is the company’s landlord after buying his properties and leasing them back for £ 19 million a year.
Two ‘independent’ directors, Zillah Byng-Thorne and Dominic Murphy, have both been working with the company and its founder for a number of years.
Cliff Weight, a director at the private shareholder group Sharesoc, said, “This is just bad governance. There is a lot of razzmatazz and, to be fair, huge success, but there are also a lot of red flags. ‘