The Pushpay Holdings Ltd (ASX: PPH) share price has been a very strong performer in 2020.
Since the start of the year the donation and engagement platform provider’s shares have risen a massive 83%
However, they won’t be building on this today after the company requested a trading halt.
Why is the Pushpay share price in a trading halt?
This morning Pushpay requested a trading halt whilst it undertakes a bookbuild process relating to the sale of a significant combined stake in the company by two existing shareholders.
According to the release, the bookbuild will facilitate the sale of 54.68 million shares in Pushpay, which represents 4.96% of the issued capital. This comprises 41.67 million shares held by interests associated with former CEO Chris Heaslip and 13.01 million shares held by interests associated with Executive Director Chris Fowler.
Following the transaction, Mr Heaslip’s stake will reduce from 4% to 0.20% (and will be held by Mission 316 Foundation) and Mr Fowler’s stake will reduce from 2.4% to 1.2%.
The sell down is fully underwritten at a floor price of NZ$1.75 per share, which represents a 7.4% discount to the last closing price of NZ$1.89 on 14 December 2020.
The bookbuild is expected to commence today and then complete in time for the market open on Wednesday.
Guidance reaffirmed.
To reassure shareholders that the two major shareholders are not selling shares because of any underperformance, Pushpay also released an update on its expectations for FY 2021.
The release explains that the company is on track to achieve its EBITDAF guidance of between US$54 million and US$58 million for the 12 months ending 31 March. This represents a 116% to 132% increase, respectively, on the FY 2020’s operating earnings of US$25.1 million.
Though, management has warned that there are uncertainties and impacts surrounding COVID-19 and the broader US economic environment that remain.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. 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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