Watch the video below for more on how losing a major shareholder is affecting Michael Kors:
Michael Kors shares were down 4.2% to $76.63 on Friday afternoon, a level not seen since February, according to Yahoo! Finance. The stock's trading volume was more than triple its three-month average daily trading volume of 3.5 million shares.
The handbag and accessories retailer announced after the markets closed on Thursday that Sportswear Holdings, one of its founding shareholders, would be selling 11.6 million shares, representing about 6% of the company's outstanding shares, according to an analyst, for $890 million. Michael Kors will not receive any proceeds from the sale, expected to close on Sept. 10. The shares were priced on Friday at $76.75 a share -- a 4% discount to the stock's closing price on Thursday.
Lawrence Stroll and Silas Chou of Sportswear Holdings will also be resigning from the retailer's board.
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Here's what analysts were saying on Friday.
Paul Lejuez, Wells Fargo Securities (Market Weight; $82-$84 Valuation Range)
KORS announced that majority shareholder Sportswear Holdings Ltd (SHL) will be selling their remaining 11.7MM shares or 6% stake in the company. SHL owners Silas Chou and Lawrence Stroll will be retiring from the board. SHL was a founder of KORS and also sold about 20% of their stake in the IPO and another roughly 25% prior to the most recent announcement, so this is not entirely unexpected. While typically viewed as a negative when insiders sell their entire stake, it may also help the company gain more independence on its board (and may avoid conflicts of interest if/when the company repurchases its China business).
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