Matt Moulding has a code under which he operates – always give investors a big return. His ‘golden rule’ is one that The Hut Group founder and chief executive stuck to like glue in the years he ran his business as a privately owned company.
‘You should have huge sympathy for people giving you finance because ultimately they’re giving you money on the understanding you’re going to give them more back,’ he said in an interview to a handful of entrepreneurs in May this year, unearthed by The Mail on Sunday.
‘That’s the golden rule. So that’s a principle on which I’ve always taken someone’s money and we always intend to – touch wood. I’ve always done it spectacularly well. I’ve given them way more back.’
Impulsive: Matt Moulding reveals to one of The Hut Group’s investors, Sir Tom Hunter, how he decided to float the firm in the space of just a couple of days
Now, following last year’s stock market flotation, it seems that rule is no longer sacrosanct. Many investors who bought into the flotation – which some warned at the time was overhyped – are now, quite rightly, seething.
THG stock listed in September last year at £5 and peaked at £7.99 in early January. But on Friday the shares closed at a new all-time low of £1.91. That means they are down 62 per cent on the flotation price and an astonishing 76 per cent down since the start of the year.
Perhaps the worst part? The public bought into the newly-listed company just as other investors, such as the US private equity giant KKR, sold out and netted large sums.
In other words, Moulding delivered for his early backers as promised, but has not – so far at least – provided the same rich returns to smaller investors lured in after the float.
In a separate interview in the summer, conducted by Sir Tom Hunter, an investor in THG, Moulding described how he made the decision to float in ‘a couple of days, not much longer if I’m honest’.
He said: ‘We were in the pandemic and sat there thinking the world is going to change. Things should accelerate from this. If I can access capital now I can bridge the gap between a UK business and the US guys.
‘So I wrestled with it for a couple of days, not much longer if I’m honest, and just thought ‘I’m doing it’. I remember making the phone call to my merger and acquisitions guy, saying: ‘By the way, we’re doing it and we’re doing it now’.’
What a contrast a few months makes. Just over a week ago, the boss of THG emerged to complain that his time since listing on the London stock exchange in September last year had been ‘miserable’.
He said in candid comments at a GQ Magazine event that he wished he had floated in the US instead, where he suggested investors would better understand tech firms like his. He also appeared to indicate he might buy the company back if shareholders do not wise up, while doubling down on his previous complaint that voracious short-sellers were mainly to blame for the drop.
He said at the moment he ‘just gets through the day’ and his wife has found him at 4am in the morning ‘literally doing phone calls, starfish lying on the floor, just because it’s a cold surface’.
The comments did little to settle investor nerves. When asked back in the summer how he deals with criticism and people who doubt his vision, Moulding – known for his single-minded focus on building his beauty, health food and tech business – responded: ‘It happens all day, every day now. More so today than at any point in my career.’
He said of listing on the London Stock Exchange: ‘The moment you go public, everyone has a view on everything you’re doing. Like it or not. For me, I love it.
‘It hurts when anyone is criticising you. But then you can use that as fuel. Collect it all up. There are quotes that people send me now and again about people throwing stones. Then you put them together and build an empire – so you can lob all your stones if you want.’
He added: ‘But prove it silently. Don’t prove it with noise and all the rest of it. Just go and do it.’
One wealthy entrepreneur, who asked not to be named, told The Mail on Sunday: ‘That advice couldn’t be more to the point. I wonder what people he’s taking advice from?
‘He needs to go away for a bit and come back with a plan to answer some of the questions about what has been going on here – not blame other people that aren’t under his control.’
Moulding also admitted: ‘I’ve probably had my toughest five months since I was running THG and last year would have probably been up there as well.’
He revealed he also once took some sound advice from an old friend during a ‘dark hour’ several years ago, who told him: ‘No one can walk in your shoes.’
He said he interpreted that as: ‘Ultimately you’ve got to man up and it’s all down to you. That’s what he was saying in a polite way. ‘Sort yourself out.’
The founder and chief executive of the group that owns the FeelUnique and MyProtein brands may want to go back for another of those pep talks.
He said that the decade that followed that conversation had been filled with ‘a lot of dark hours, believe me’.