Hargreaves Lansdown stock plunges as founder sells £300m shares

Rick Steves

The timing of the sale of £300 million shares has prompted some colorful remarks given his pro-Brexit stance as the country still deals with the side-effects of the geopolitical move. Last year, Mr. Hargreaves sold shares worth £580m, claiming to be diversifying his assets. 

Peter Hargreaves, co-founder of Hargreaves Lansdown, is selling around £300 million shares in the company via an accelerated bookbuild. The price of the stock plunged today by nearly 7% as it gets closer to erase the gains year-to-date.

The sale price of the shares and the final size of the offering will be determined after the books have closed. Hargreaves Lansdown will not receive any proceeds from the offering.

Mr. Hargreaves founded Hargreaves Lansdown with Stephen Lansdown in 1981 and the firm has grown into a £7.32 billion fund empire.

Hargreaves donated £3.2m to the Leave.EU campaign in 2016 founded by Arron Banks. He also asked 15 million UK householders to support the leave campaign in the European Union membership referendum. He expected Brexit to lead to insecurity, but that it would turn out to be very effective. 

Peter Hargreaves has recently spoke about the Brexit vote and the pandemic: “I voted to leave the EU. Fully out. There was no way we would get a sensible deal because that would finish the EU because then every other country would want one. In my opinion, it should only ever have been a free trade area. All this political union is absolutely ridiculous.’I think over the next five years we’ll leave completely even with this deal.”

“We should remember that we are a resilient bunch. The Covid virus has caused a lot of grief in this country and laid to waste the hospitality and tourist industry. It’s been terrible for them but they will come back stronger but we have adapted to the situation and we would have done exactly the same thing had we come out of Europe. So I don’t care what this deal is, it’s a bad one.” said Mr Hargreaves.

The timing of the sale of £300 million shares has prompted some colorful remarks given his pro-Brexit stance as the country still deals with the side-effects of the geopolitical move. Last year, Mr. Hargreaves sold shares worth £580m, claiming to be diversifying his assets.

Hargreaves Lansdown is not only the largest financial services company in the UK by a substantial margin, but has operated its business since its establishment in 1982 by concentrating solely on British domestic market customers who operate their online accounts themselves with no reliance on partners or affiliates.

In 2019, Peter Hargreaves found himself dragged into the Woodford scandal. He was furious that the asset manager continued to operate while in collapse, which led Hargreaves Lansdown to provide the fund, inevitably causing issues with its customers as they no longer were able to withdraw. All this in a year he received a £64 million dividend.

“The clients have been stuffed in this horrible Woodford fund. I’ve drawn this big dividend. Nothing to do with me and I’ve been very successful. What do they want me to do? Give the dividend back to the unit holders?” said Mr Hargreaves in defence of the £64 million dividend he received from the company that he is entitled to as he is a 32% shareholder.

“It’s annoyed the hell out of me that it would appear he (referring to Neil Woodford) has not been truthful with Hargreaves Lansdown. But it’s also annoyed me that they let it go on so long” said Mr Hargreaves publicly. Neil Woodford has publicly announced plans to relaunch his career as a fund manager.

 

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