The Hut Group share price is hovering near its all-time low as concerns about the company’s future remain. TGH stock is trading at 83.74p, about 90% below the highest level in 2021. As a result, its market cap has crashed to about $1 billion.
Rise and Fall of The Hut Group
THG, formerly known as The Hut Group, has had a remarkable rise and fall. The firm, backed by Masayoshi Son, went public in London in 2020. The stock price jumped by more than 20% at the time, bringing its market cap to more than 7 billion pounds.
Since then, the THG share price has been in a strong bearish trend as concerns about the company’s remain. As a result, the shares have crashed from 836p to the current 83.75p, making it one of the top downfalls in corporate UK’s history.
The stock price recently rose as investors cheered the likelihood that the company would be acquired. However, these hopes were short-lived after Nick Candy walked away from making an offer. In addition, the company recently rejected a bid by Belerion that valued ut at 2.1 billion pounds. At the same time, King Street Capital said that it will not make a bid for the firm.
Therefore, the THG share price is struggling as investors worry about the company’s future as a standalone firm. Most importantly, there are concerns that the soaring producer and consumer inflation will hinder the company’s growth. Besides, most of its products are usually discretionary in nature. Most importantly, its margins will continue thinning in the coming months.
The Hut Group share price forecast
The daily chart shows that the THG stock price has been in a strong bearish trend in the past few months. The shares drop accelerated after hopes of a takeover faded. As a result, it has moved slightly below the 25-day and 50-day moving averages, while the MACD has moved below the neutral point. At the same time, the Mayer Multiple has moved to 0.46, meaning it is getting a bit cheap from a technical perspective.
Therefore, there is a likelihood that the stock will likely continue falling as bears target the key support at 65p. However, a move above the resistance at 90p will invalidate the bearish view.