Pushpay Holdings Ltd (ASX: PPH) shares have gone into a trading halt whilst it facilitates the selldown of shares.
What’s happening?
Pushpay is undertaking a fully underwritten bookbuild to facilitate a sell down of shares held by interests associated with Chris Heaslip (the former CEO and former director) and interests associated with executive director and ‘visionary’ Chris Fowler (founder of Church Community Builder).
The sale involves 54.68 million shares, being 41.67 million shares from Chris Heaslip and 13.01 million shares from Chris Fowler.
After the transaction, the Heaslip stake will reduce from 4% to 0.2% (and will be held by Mission 316 Foundation) and the Fowler stake will reduce from 2.4% to 1.2%.
Pushpay said that the sell down will provide further free float and liquidity and is underwritten at a floor price of NZ$1.75 per share. This represents a 9.3% discount to the 5-day average price of NZ$1.93 per share, and a discount of 7.4% to the last closing price of NZ$1.89.
Of the remaining 13 million shares associated with Chris Fowler, 6.51 million (being 50% of the remaining number, and 0.59% of the issued shares of Pushpay) are subject to a lock up deed. Those shares can’t be sold before 13 June 2021.
What to make of this
Sometimes the sale of shares can herald some painful news coming up. Pushpay reaffirmed its EBITDAF guidance (EBITDA explained, the F stands for foreign currency) of between US$54 million to US$58 million which is still more than doubling of EBITDAF.
However, the company did say that uncertainties and impacts surrounding COVID-19 and the broader US economic environment remain.
So why do two Pushpay figures want to sell their shares? No reason was given. But this isn’t the first time that Mr Heaslip has sold shares.
In July 2019 Mr Heaslip sold 12.2 million shares at a (split adjusted) price of NZ$0.925. Using the floor price, Pushpay shares have gone up 89% since then. At that time, Pushpay’s guidance for FY20 EBITDAF was between US$18.5 million to US$20.5 million, so Pushpay has grown a lot since then.
There have been share sales by management of other ASX software shares like Kogan.com Ltd (ASX: KGN) but that business has kept on growing profit and scale.
Only time will tell what happens and if there’s something to be uncovered, but at this stage I’m not concerned. I still believe that Pushpay is one of the most promising ASX growth shares around with its growing profit margins and possible growth avenues.
Other ASX shares that I’ve got my eyes on include A2 Milk Company Ltd (ASX: A2M) and Redbubble Ltd (ASX: RBL).
