AO World said non-executive chairman Richard Rose sold nearly all of his stake in the company for £10m, nonetheless it was stressed that he remains committed to the company.
The white goods etailer, which floated on the London Stock Exchange a year ago, said Rose sold 1.3 per cent of its outstanding shares at a price of £1.80. Its shares were down 7.6 per cent at 177 pence per share today.
The fact shares in the struggling etailer had wavered slightly on Friday was probably down to the share sale. Putting more shares back onto the open market actually reduces the price of shares that are currently available.
The move comes a month after it shocked markets with a profit warning amid tougher trading conditions. It said some of the revenue growth to date had been down to extra publicity surrounding the company at that time.
John Roberts, AO World's chief executive, said:
The share sale by Richard Rose follows the expiry of the post-IPO lock-up and will help to further increase liquidity and the number of shares in public hands.
Richard remains committed to the company, both as a shareholder and as its chairman.
AO World stunned investors after floating last February at 285 pence per share, giving it a market cap of £1.2bn. This was despite the fact it posted pre-tax profits of just £8.7 million for 2013.
But shares in the company first fell below the IPO price this year, when Panmure Gordon’s Mike Stewart said it was overvalued and urged investors “to capitalise on the unjustified level” of price growth since 2014.
Analysts at another broker, Jefferies, the joint global coordinator on the IPO, had also voiced concerns. "In the rear-view mirror, [the] IPO valuation looks punchy", it said in a note last year.