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Major Investor Sells Off Half a Billion Dollars in Chewy Stock
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Online pet supplies retailer Chewy ( CHWY ) announced that a firm connected to its biggest shareholder was selling off half a billion dollars in stock.
The company said that Buddy Chester Sub LLC, an entity affiliated with funds advised by top investor BC Partners Advisors LP, was putting up a public offering valued at $500 million. In addition, the underwriters have a 30-day option to acquire another $75 million in stock.
Chewy explained that concurrently, it would buy back $50 million worth of shares from Buddy Chester. Those shares would be priced at what the underwriters pay, and "will be cancelled and retired upon completion of the Concurrent Repurchase."
Chewy added that the $50 million purchase is being executed separately from its current $500 million share repurchase program, which began in May and will not be affected by that transaction.
Shares of Chewy initially declined Thursday morning but reversed course and recently edged higher. They have added nearly more 40% of their value this year. The stock price has been impacted by cryptic social media posts and a short-lived investment by meme stock hero "Roaring Kitty," a.k.a. Keith Gill .
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