So What Does GoPro's 'Shelf Registration' Actually Mean?
The secondary will allow the firm to raise funds from the equity markets. GoPro raised raised $490 million in its June IPO.
So what exactly is a 'shelf registration' and how does it relates to GoPro's stock?
A shelf registration or a "shelf offering is where certain issuers are allowed to offer and sell securities to the public without a separate prospectus for each act of offering. Instead, there is a single prospectus for multiple, undefined future offerings."
This action essentially allows the firm to create an opportunity to sell new shares in an organized and predetermined time window. As GoPro CEO Nick Woodman indicated, "this offering is intended to facilitate a more orderly and gradual sale of shares" and "reduce the impact that the IPO lock-up expiration may have on our stock price."
The company is essentially "reserving" the number of shares that it would like to sell. By allocating the shares, the firm now has the opportunity to sell those shares in the market whenever the time is most favorable to the firm, up to three years in the future.
This also allows the company to maintain flexibility when raising new funds.
GoPro has indicated that it will raise $800 million by the shelf -- this means that the firm can sell up to 10 million shares, based on Friday's close of $79.06 per share. This represents about 8 percent of the outstanding shares (Take Shelf Price and divide by Share Price: $800,000,000/$79.06 = 10,118,897 shares).
GoPro traded recently at $75.37, down 4.6 percent.
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