Hargreaves’ shares plunge after co-founder sells £300m stake

Shares in Hargreaves Lansdown have fallen more than any other FTSE 100 firm today after it revealed co-founder Peter Hargreaves sold almost £300million of his shares in the firm.

They declined by 6.7 per cent as it confirmed that the billionaire had offloaded nearly 20 million shares, or about 4 per cent, of the firm to institutional investors.

The sale takes his total ownership in the financial services giant to less than 20 per cent and comes twelve months after he offloaded shares worth £550million as part of a plan to diversify his assets.

 The sale takes his total ownership in the financial services giant to less than 20 per cent and comes twelve months after he offloaded shares worth £550million

His fellow co-founder Stephen Lansdown has also been recently downsizing his stake in the business. Soon after the UK lockdown began, he sold shares valued at £160million soon after share prices tumbled to a multi-year low of £12.77.

He then sold £103million in November, leaving him with a 5.7 per cent share in the business, which he started with Peter Hargreaves 40 years ago in a Bristol spare bedroom.

Hargreaves’ announcement follows Dunelm deputy chairman Will Adderley, son of Dunelm’s husband and wife co-founders Bill and Jeany Adderley, selling £192million of his shares in the home furnishings chain.

Dunelm’s share price has recovered very well since diving in early 2020. However, Hargreaves Lansdown’s shares price has struggled to get near their former highs even though its financial results showed profits and customer numbers booming.

It said about 220,000 new customers joined the firm’s platform last year, while in the last six months of 2020, profits grew by £12.1million to £152million, revenues climbed 16 per cent to almost £300million, and new business jumped 40 per cent.

The value of the company’s shares has soared about ninefold since its initial public offering in 2007 despite gradually tumbling from around mid-2019 to early 2020.

The value of Hargreaves Lansdown’s shares has soared about ninefold since its initial public offering in 2007 despite gradually tumbling from around mid-2019 to early 2020 

Peter Hargreaves stepped down as chief executive in 2010, and then departed from the board of directors and retired five years later before setting up the Blue Whale Growth Fund in 2017.

However, his influence returned to Hargreaves Lansdown’s board in October 2020 when he managed to get his representative Adrian Collins appointed as a non-executive director.

Rich: Peter Hargreaves was worth £2.4billion according to the 2020 Sunday Times Rich List

In an interview with This is Money the same month, he called on the government to cut regulations to get more people starting businesses. ‘Is all of this stuff to tackle issues such as money laundering actually stopping money laundering?’ he asked.

‘No. Regulation hasn’t stopped scandals and fraud. It just makes life harder for everyone else and especially those who want to start a new business.’

Last month, the Brexit backer argued that the UK should have gone for a ‘No Deal’ arrangement with the European Union, partly because the trade deal agreed between the two sides created a lot more red tape for businesses. 

His net worth was estimated at £2.4billion according to the most recent Sunday Times Rich List, having plummeted by about a fifth from the previous year’s results.

However, the same newspaper found he paid around £91million to the UK exchequer last year, making him one of Britain’s ten highest-giving taxpayers.

His Blue Whale Capital firm invests in some of America’s most famous and largest technology companies, including Amazon, Adobe Systems, Facebook, Mastercard and Microsoft.

He expressed high praise for Amazon founder Jeff Bezos, saying: ‘He is investing in the future like nobody else, and if he can’t do something just yet, he still takes that space, and it becomes profitable in the long-run.

‘It’s like at Hargreaves Lansdown when we launched our child Isas. We knew they wouldn’t be profitable, but it means other members of the family might join us, and we hope those children will grow up to remain clients.’

This post first appeared on Dailymail.co.uk