British e-commerce firm THG said Tuesday that it is looking to spin off its technology platform, Ingenuity, in a blow to founder Matthew Moulding’s vision to build a large publicly-listed technology name in the U.K.

THG, which was previously known as The Hut Group, said in an investor update Tuesday that it is “actively undertaking detailed work to review potential structures to facilitate the demerger of THG Ingenuity.”

“At this stage no certainty can be provided on a demerger timescale whilst we consider the options to achieve this outcome, however, structuring tax clearances have now been approved by HMRC,” the U.K.’s tax collection authority, THG added.

Any proposed demerger would require shareholder approval, the firm said, adding that further information on its proposal to spin off the business will be provided to shareholders in due course.

If and when the demerger is approved, THG’s group company will consist of only its THG Beauty and THG Nutrition divisions. The company believes this will simplify its structure and help investors understand the business better.

Shares of THG closed down more than 12% Tuesday on the back of the news.

THG formed THG Ingenuity in 2021 as a separate venture selling e-commerce solutions for retailers. THG’s Moulding has previously described THG Ingenuity as a “social media influencer platform” to promote products, including brands sold by THG as well as those sold by other companies, too.

The venture was formed with the help of Japanese tech investing heavyweight SoftBank, which in May 2021 bought an 8% stake in THG for £481 million. The deal at the time gave SoftBank the option to invest an additional $1.6 billion in THG Ingenuity.

However, in October 2022, SoftBank ended its investment deal with THG and sold its entire stake in the company to Moulding.

In addition to pursuing a spinoff for its Ingenuity arm, THG is also planning to transfer all its currently publicly-traded shares to the newly created equity shares commercial companies (ESCC) segment of the London Stock Exchange.

Previously, THG was listed on the standard segment of the LSE. However, firms listed in this category on the stock exchange aren’t eligible to be considered for inclusion in major blue-chip stock indexes, like the FTSE 100.

After tech executives and investors bemoaned London’s IPO market structure, officials within the LSE, U.K. government and Financial Conduct Authority worked together to reform London’s listings rules and make the exchange a more attractive venue for high-growth tech firms.

Earlier this year, the FCA introduced the ESCC, among other changes, as part of the wider reforms to Britain’s listings environment.

THG said the new listings structure for the firm would boost its chances of being considered for inclusion in U.K. stock indexes and, in turn, improve passive investment flows and liquidity for company shares.

THG has struggled to restore the value of its shares to the monster highs of the tech rally of 2020 and 2021, when investors were throwing cash at business benefiting from stay-at-home trends and a broader long-term shift towards online shopping.

Shares hit an all-time intraday high of £8 a share in December 2020.

Today, they’re trading at 57.65p, a fraction of the value they were worth at the peak of the Covid-driven boom in tech and e-commerce stocks.

In tandem with the firm’s struggles with the market, Moulding has been a prominent critic of London’s market for tech listings, telling GQ Magazine in 2021 that THG’s IPO “sucked from start to finish” and was ultimately a “mistake.”

He also said at the time that it would have been better to float THG in the U.S. rather than the U.K.