British Prime Minister Boris Johnson (L) is shown around by The Hut Group founder and CEO Matthew Moulding (R) during a visit to a fulfillment center in Warrington, in north-west England on December 10, 2019.
BEN STANSALL | POOL | AFP via Getty Images
LONDON — British e-commerce company THG has said it knows of “no notifiable reason” for a 35% plunge in its share price on Tuesday.
The Softbank-backed firm‘s stock suddenly nosedived during late afternoon trade to notch its worst single-day performance since listing on the London Stock Exchange last September.
The move came following the company’s capital market day, which set out to reassure investors and analysts that THG could turn things around, with shares now down 65% since the turn of the year.
In his presentation, intended to assuage concerns and explain THG’s Ingenuity sales platform, CEO and founder Matt Moulding lashed out at short-sellers, but analysts were left disappointed.
In a statement to the market on Wednesday, THG added that “no material new information was disclosed at the event.”
“Since its IPO in September 2020, THG has consistently delivered ahead of its targets set at the time of IPO and recently reported a strong first half performance across all divisions, with Group revenue of £958.8 million ($1.31 billion), +44.7% year-on-year,” the company said.
“The Group also has a very strong liquidity position as it enters its peak trading season, with available cash as at 30 September 2021 of £700.0 million across long dated 3-5 year facilities.”
Although capital markets days are intended to help analysts and investors better understand certain aspects of a business, THG’s effort was “eye-opening for the wrong reasons,” according to Russ Mould, investment director at British online stockbroker AJ Bell.
“It seems that attendees didn’t get the level of information they wanted, and messages were quickly fed back to HQ to dump the stock,” Mould said.
“Having joined the stock market with a lot of fanfare, the market now seems to be taking the view that THG was grossly overvalued and that breaking the business up creates more questions than answers.”
THG, previously known as The Hut Group, sells vitamin, nutrition and beauty products, running brands such as MyProtein, Lookfantastic and Mankind, while licensing out its technology. Its 500 pence per share IPO was one of the biggest technology floats of 2020.
Since announcing plans in September to spin off its beauty business in favor of focusing on THG Ingenuity — an e-commerce platform handling web sales and logistics for companies to sell products directly to consumers — the group’s share price has cratered.
SB Management, a division of Japanese tech giant SoftBank, announced in May that it would invest $1.6 billion into Ingenuity, giving it a 19.9% stake, while also taking a $730 million stake in THG itself.
A ‘conundrum for investors’
THG’s shares initially began to rebound on Wednesday, before falling more than 10%, and were down 4.6% by late morning. Mould suggested that the valuation following Tuesday’s freefall presents a “conundrum for investors.”
“On one hand, sentiment is incredibly weak towards the stock and there is no point going against the flow if the market has decided THG is a dud,” he said.
“On the other hand, investors are now being given the chance to snap up shares in a business at a price where the original source of excitement is now essentially thrown in for free.”
THG Ingenuity initially prompted substantial excitement, with key clients including Nestle and Unilever offering it significant credibility for investors.
Mould suggested that a lot of product manufacturers now want a direct-to-consumer service, meaning the growth prospects for the business are theoretically strong.
SoftBank’s buy option values the Ingenuity division at £4.6 billion at current exchange rates, but at Wednesday morning’s share price, the entire group was valued at around £3.15 billion, Mould highlighted.
Mould said this would effectively mean investors could buy the beauty and nutrition operations while acquiring the tech and logistics offerings for “nothing.” However, the big question remains as to what each business would look like as a standalone entity in terms of cost base, capital expenditure and cash flow, he suggested.
“THG has been criticized for not being open enough about the financial breakdown. Until it starts providing some answers, the shares could well remain under pressure as it’s very hard to properly value this business without all the right information,” he said.
An iPhone 16 signage is seen on the window at the Fifth Avenue Apple Store on new products launch day on September 20, 2024 in New York City.
Michael M. Santiago | Getty Images News | Getty Images
The Indonesian government expects Apple to increase its proposed $100 million investment into the country, according to state media, as the iPhone maker seeks clearance from Jakarta to sell its latest phones.
The American tech giant’s latest smartphone model doesn’t meet Indonesia’s 40% domestic content requirements for smartphones and tablets and hasn’t been granted clearance to be sold in the country.
The purpose of the ban is to protect local industry and jobs, with officials asking Apple to increase its investments and commitments to the economy in order to gain greater access.
According to a report from Indonesian state media, the country’s Ministry of Industry met with representatives from Apple on Thursday regarding its proposal to invest $100 million over two years.
The funds would go toward a research and development center program and professional development academy in the country, as per the report.
The company also plans to produce accessory product components, specifically mesh for Apple’s AirPods Max, starting in July 2025, it added.
Apple didn’t immediately respond to a request for comment from CNBC.
While the new offer is 10 times larger than a proposal that was reported earlier, the government is still striving to sweeten the deal to get a “fair” commitment.
“From the government’s perspective, of course, we want this investment to be larger,” industry ministry spokesperson Febri Hendri Antoni Arif told state media on Thursday.
He said that a larger investment would help the development of Indonesia’s manufacturing sector, adding that its domestic industry was capable of supporting production of Apple devices such as chargers and accessories.
While Indonesia represents a small market for Apple, it also offers growth opportunities as it has the world’s fourth-largest population, according to Le Xuan Chiew, a Canalys analyst focusing on Apple strategy research.
“Its young, tech-savvy population with growing digital literacy aligns with Apple’s strategy to expand [global sales],” he said, noting that it also offers potential for manufacturing and assembly that supports Apple’s efforts to diversify its supply chain.
Success in this market requires a long-term approach, and Apple’s investment offer demonstrates a commitment to complying with local regulations and paving the way for future growth, he added.
Intuit CEO Sasan Goodarzi speaks at the opening night of the Intuit Dome in Los Angeles on Aug. 15, 2024.
Rodin Eckenroth | Filmmagic | Getty Images
Intuit shares fell 6% in extended trading Thursday after the finance software maker issued a revenue forecast for the current quarter that trailed analysts’ estimates due to some sales being delayed.
Here’s how the company performed in comparison with LSEG consensus:
Earnings per share: $2.50 adjusted vs. $2.35 expected
Revenue: $3.28 billion vs. $3.14 billion
Revenue increased 10% year over year in the quarter, which ended Oct. 31, according to a statement. Net income fell to $197 million, or 70 cents per share, from $241 million, or 85 cents per share, a year ago.
While results for the fiscal first quarter topped estimates, second-quarter guidance was light. Intuit said it anticipates a single-digit decline in revenue from the consumer segment because of promotional changes for the TurboTax desktop software in retail environments. While that will affect revenue timing, it won’t have any impact on the full 2025 fiscal year.
Intuit called for second-quarter earnings of $2.55 to $2.61 per share, with $3.81 billion to $3.85 billion in revenue. The consensus from LSEG was $3.20 per share and $3.87 billion in revenue.
For the full year, Intuit expects $19.16 to $19.36 in adjusted earnings per share on $18.16 billion to $18.35 billion in revenue. That implies revenue growth of between 12% and 13%. Analysts polled by LSEG were looking for $19.33 in adjusted earnings per share and $18.26 billion in revenue.
Revenue from Intuit’s global business solutions group came in at $2.5 billion in the first quarter. The figure was up 9% and in line with estimates, according to StreetAccount. Formerly known as the small business and self-employed segment, the group includes Mailchimp, QuickBooks, small business financing and merchant payment processing.
“We are seeing good progress serving mid-market customers in MailChimp, but are seeing higher churn from smaller customers,” Sandeep Aujla, Intuit’s finance chief, said on a conference call with analysts. “We are addressing this by making product enhancements and driving feature discoverability and adoption to improve first-time use and customer retention.”
Better outcomes are a few quarters away, Aujla said.
CreditKarma revenue came in at $524 million, above StreetAccount’s $430 million consensus.
At Thursday’s close, Intuit shares were up about 9% so far in 2024, while the S&P 500 has gained almost 25% in the same period.
On Tuesday Intuit shares slipped 5% after The Washington Post said President-elect Donald Trump’s proposed “Department of Government Efficiency” had discussed developing a mobile app for federal income tax filing. But a mobile app for submitting returns from Intuit is “already available to all Americans,” CEO Sasan Goodarzi told CNBC’s Jon Fortt.
Goodarzi said on CNBC that he’s personally communicating with leaders of the incoming presidential administration.
On the earnings call, Goodarzi sounded optimistic about the economy.
“Our belief, which is not baked into our guidance, is that we will see an improved environment as we look ahead in 2025, particularly just with some of the things that I mentioned earlier around just interest rates, jobs, the regulatory environment,” he said. “These things have a real burden on businesses. And we believe that a better future is to come.”
Bluesky has surged in popularity since the presidential election earlier this month, suddenly becoming a competitor to Elon Musk’s X and Meta’s Threads. But CEO Jay Graber has some cautionary words for potential acquirers: Bluesky is “billionaire proof.”
In an interview on Thursday with CNBC’s “Money Movers,” Graber said Bluesky’s open design is intended to give users the option of leaving the service with all of their followers, which could thwart potential acquisition efforts.
“The billionaire proof is in the way everything is designed, and so if someone bought or if the Bluesky company went down, everything is open source,” Graber said. “What happened to Twitter couldn’t happen to us in the same ways, because you would always have the option to immediately move without having to start over.”
Graber was referring to the way millions of users left Twitter, now X, after Musk purchased the company in 2022. Bluesky now has over 21 million users, still dwarfed by X and Threads, which Facebook’s parent debuted in July 2023.
X and Meta didn’t immediately respond to requests for comment.
Threads has roughly 275 million monthly users, Meta CEO Mark Zuckerberg said in October. Although Musk said in May that X has 600 million monthly users, market intelligence firm Sensor Tower estimates 318 million monthly users as of October.
Bluesky was created in 2019 as an internal Twitter project during Jack Dorsey’s second stint as CEO, and became an independent public benefit corporation in 2022. In May of this year, Dorsey said he is no longer a member of Bluesky’s board.
“In 2019, Jack had a vision for something better for social media, and so that’s why he chose me to build this, and we’re really thankful for him for setting this up, and we’ve continued to carry this out,” said Graber, who previously founded Happening, a social network focused on events. “We’re building an open-source social network that anyone can take into their own hands and build on, and it’s something that is radically different from anything that’s been done in social media before. Nobody’s been this open, this transparent and put this much control in the users hands.”
Part of Bluesky’s business plan involves offering subscriptions that would let users access special features, Graber noted. She also said that Bluesky will add more services for third-party coders as part of the startup’s “developer ecosystem.”
Graber said Bluesky has ruled out the possibility of letting advertisers send algorithmically recommended ads to users.
“There’s a lot on the road map, and I’ll tell you what we’re not going to do for monetization,” Graber said. “We’re not going to build an algorithm that just shoves ads at you, locking users in. That’s not our model.”
Bluesky has previously experienced major growth spurts. In September, it added 2 million users following X’s suspension in Brazil over content moderation policy violations in the country and related legal matters.
In October, Bluesky announced that it raised $15 million in a funding round led by Blockchain Capital. The company has raised a total of $36 million, according to Pitchbook.