Chewy stock dips after hours on public offering announcement

Chewy Inc. announced a public offering of $500 million of its common stock after the market closed on Thursday. The offering is being conducted by Buddy Chester Sub LLC, an entity associated with BC Partners Advisors LP, Chewy's largest shareholder. In addition to the public offering, the selling stockholder is expected to provide underwriters with a 30-day option to purchase an additional $75 million of Chewy common stock. This move indicates a strategic decision by the largest shareholder to liquidate some of their holdings. Simultaneously, Chewy has committed to repurchasing $300 million worth of its common stock from the selling stockholder at the same price as the underwriters in the offering. This repurchase will result in the cancellation and retirement of the shares, which reflects Chewy's ongoing strategy to manage its capital structure effectively. The company has reassured investors that its existing $500 million share repurchase program remains intact and unaffected by this transaction. As a result of these announcements, Chewy's stock experienced a decline of 3.09% in after-hours trading, with shares priced at $30.15 at the time of publication. This dip in stock price may be attributed to investor reactions to the dilution of shares from the public offering, despite the concurrent repurchase. Overall, the dual actions of a public offering and a share repurchase highlight Chewy's approach to balancing shareholder interests while navigating market conditions. Investors will be closely monitoring the impact of these transactions on the company's stock performance and overall market perception.