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The Key Takeaways
- A firm affiliated with Chewy's biggest shareholder is selling off $500 million in stock.
- The company also announced that they would purchase $50 million of shares in addition to cancelling and retiring them.
- This $50 million acquisition is separate from the current program of share repurchases that began in May.
Chewy Online Pet Supplies (CHWY), an online retailer of pet products, announced that its largest shareholder had a company selling off half-a-billion dollars’ worth of inventory.
According to the company, Buddy Chester Sub LLC is an entity that has been affiliated with BC Partners Advisors LP – a top investment firm – and will make a $500,000,000 public offering. The underwriters also have the option of acquiring another $75,000,000 in stock within a 30 day period.
Chewy said that, concurrently with Buddy Chester’s sale of $50 million worth shares to Chewy, the company would also buy those same shares. Those shares would be priced at what the underwriters pay, and "will be cancelled and retired upon completion of the Concurrent Repurchase."
Chewy said that its $50 million acquisition is separate from the $500 million program of share repurchases that began in May, and that it will not be impacted by this transaction.
Chewy’s shares fell initially on Thursday, before reversing course. They are now slightly higher. The stock has gained nearly 40% in value since the beginning of this year. Social media posts and an investment from a meme stock hero have impacted the stock price. “Roaring Kitty,” a.k.a. Keith Gill
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