On Monday, shares of luxury parka maker Canada Goose Holdings Inc. GOOS are down over 4% in afternoon trading after the company announced a proposed public secondary offering of 12.5 million voting shares about three months after its $250 million IPO.
Subject to market conditions, these shares will be offered and sold by specific investors of Canada Goose, including Bain Capital and members of the company's management. Additionally, certain selling shareholders will be expected to give the underwriters a 30-day option to buy up to an additional 1.875 million subordinate voting shares at the public offering price.
Canada Goose said it will not be receiving any proceeds from this sale of stock, and the voting shares will be traded on the Toronto Stock Exchange and the New York Stock Exchange under the ticker "GOOS."
According to Investopedia , companies who make a secondary public offering do so because they wish to refinance, or raise capital for growth. This particular secondary offering-when one or more major stockholders sell all or a large portion of their holdings-happens "when the founders of a business (and perhaps some of the original financial backers) determine that they would like to decrease their positions in the company."
Investopedia notes that this type of offering is common after an IPO, and that it doesn't increase or change the number of shares on the market; no new shares are released
Canada Goose made its public debut back in March, opening at $18 a share. The company, known for its $900+ parkas with fur-lined hoods, closed its first day of trading up over 25%. And just a few weeks ago, Canada Goose reported a smaller-than-expected fourth-quarter loss.
For an in-depth look at Canada Goose's IPO, check out this episode of Zacks Shopping for Stocks:
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