THG, the Manchester-based online retailer, is under scrutiny regarding its potential departure from the FTSE 250 Index once more. It rejoined this prominent index in September 2025, but its share price, which has fluctuated significantly, now raises concerns.
THG’s Current Market Situation
Following a considerable drop to 25p, THG saw a surge to over 50p after a positive Q4 2025 trading update. However, its share price has recently reverted to approximately 28p, resulting in a market capitalization of £467.51 million.
The ongoing volatility of its share price has ignited discussions about the company’s stability within the FTSE 250. The concern is that without a turnaround, a second exit from the index could be possible.
Market Capitalization and Future Prospects
- Current market cap: £467.51 million.
- Share price fluctuation: Peaked at 50p, currently at 28p.
Despite the uncertainties, THG’s market cap remains significantly above the levels it faced before its last drop from the FTSE. The upcoming full-year results in April could play a crucial role in shaping investor confidence.
Factors Impacting THG’s Share Price
One of the primary issues affecting THG has been the activity of hedge funds, known for aggressive short-selling strategies. CEO Matt Moulding has publicly criticized these funds for negatively impacting share prices through negative narratives. However, there are indications that hedge fund influence may be waning.
Short Selling Trends
According to Short Interest Tracker, hedge fund short positions in THG have decreased significantly:
- Current short positions: 0.59%.
- Peak short positions in 2023: 4%.
This reduction suggests that THG’s shares are less vulnerable to hedge fund activities, potentially stabilizing its share price.
Recent Developments and Strategic Moves
In August 2025, THG completed a £103 million sale of Claremont Ingredients, which was positively received by the market. CEO Moulding also invested £8.5 million in THG shares, increasing his stake to 25.4%. This strategic move resulted in a 7% increase in THG’s share price to 37.20p, boosting its market cap back over £600 million.
Trading Performance
THG reported a strong conclusion to 2025, with a 7% increase in group revenue during the final quarter. For the full year, the company achieved a modest growth of 2.3%, marking its first revenue growth since 2021.
Despite the trading performance improvement, THG’s share price remains a subject of concern. A notable drop of 9% in a single day reflects the volatility the company is experiencing, even as it entered into strategic partnerships with brands like Greencore and Mars.
Looking Ahead
The FTSE indices undergo evaluations quarterly, with the next scheduled review in June. Investors and stakeholders alike will be closely monitoring THG’s performance in the coming months, as the company’s position in the FTSE 250 Index hangs in the balance.
