The Marley Spoon AG (ASX: MMM) share price is under pressure on Monday and is trading notably lower.
In morning trade, the meal kit delivery company’s shares are down 8% to $1.86.
This means the Marley Spoon share price is now down 31% from $2.71 since the start of the year.
Why is the Marley Spoon share price sinking?
The catalyst for the weakness in the Marley Spoon share price today was news that Woolworths Group Ltd (ASX: WOW) has sold its stake in the company.
According to the release, the retail conglomerate has ceased to be a substantial holder following the completion of a sale of 28,026,000 Chess Depository Interests (CDIs) or 28,026 ordinary shares in Marley Spoon via an underwritten block trade. This represents a 9.87% stake in the company.
Woolworths has agreed to sell its interest for $1.91 per CDI, which equates to a discount of 5.9% to where Marley Spoon shares were trading at Monday’s close.
This values Woolies’ offloaded stake at approximately $53.5 million.
What now?
One positive for the Marley Spoon share price is that Woolworths may no longer be a shareholder, but it doesn’t plan to leave the company high and dry.
The release notes that in June 2019, Woolworths and Marley Spoon entered into a five year strategic growth alliance. This alliance covers things such as marketing support and customer origination programs, as well as cooperation on logistics and supply chain operations.
Positively, Woolworths continues to remain committed to the ongoing growth alliance at least until the end of the agreement in 2024.
The retail giant has not yet commented on the reason for the sale of its Marley Spoon stake. Nor has it revealed what it plans to do with the proceeds.
The post Marley Spoon (ASX:MMM) share price sinks 8% after Woolworths sells its stake appeared first on The Motley Fool Australia.
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More reading
- Here’s why the Woolworths (ASX:WOW) share price is in focus today
- The Woolworths (ASX:WOW) share price has gained 17% in the last 6 months
- 5 things to watch on the ASX 200 on Thursday
- ASX 200 company bosses lobby for reopening plan
- Woolworths (ASX:WOW) share price history: What caused the biggest ups and downs?
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Marley Spoon AG. The Motley Fool Australia owns shares of and has recommended Marley Spoon AG. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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