Shares of Rover Group ROVR dropped after the online pet care marketplace said it launched a secondary offering of 11 million common shares.
The stock will be offered by holders, so Rover will receive no proceeds from the sale.
Underwriters of the offering have a 30-day option to buy as many as 1.65 million more shares from the holders.
The holders were investors in A Place for Rover, before it merged with Nebula Caravel Acquisition. They're subject to restrictions on the resale of the shares they acquired in connection with the merger.
Nebula Caravel was a blank-check company through which Rover went public last summer.
Morgan Stanley, Goldman Sachs and JPMorgan lead the underwriters for the secondary sale.
At last check shares of Rover dropped 6% to $13.12.
Rover recently reported a third quarter net loss of 73 cents a share on revenue of $35.2 million. Analysts polled by FactSet were expecting a net loss of 8 cents a share on revenue of $35.1 million.
The Seattle-based company reported a 32% rise in new bookings for the quarter, a jump from prepandemic levels.
“We are benefitting from an increase in pet ownership, the strong emotional bonds we are forming with our pets and the ongoing shift to online pet care options," Chief Executive Aaron Easterly said in a statement.
"Looking ahead, we expect these trends will continue to drive secular growth in our category leading business."
For the year, the company expects revenue to range between $106 million and $110 million, up from its previous guidance of between $102 million and $110 million. Analysts at FactSet are expecting revenue of $108.9 million.