NEW YORK (TheStreet) -- Shares of Lululemon Athletica Inc. (LULU) are up 5.35% to $41.12 in pre-market trading as company founder Dennis "Chip" Wilson agreed to sell half his stake in the yoga gear maker to private equity firm Advent International for $845 million in an attempt to resolve a dispute with the company's board, the Wall Street Journal reports.
Wilson will sell a 13.85% stake in the company, and Lululemon agreed to give two board seats to Advent and submit to a review of its governance practices, the Journal said.
TheStreet Ratings team rates LULULEMON ATHLETICA INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate LULULEMON ATHLETICA INC (LULU) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows: