London-based Greenvale Capital fully exited its position in The Goodyear Tire & Rubber Company (GT 0.72%) during the third quarter, reducing its stake by 10,250,000 shares for an estimated $106.3 million, according to a Friday SEC filing.
What Happened
According to a filing with the Securities and Exchange Commission (SEC) on Friday, Greenvale Capital LLP sold its entire stake in The Goodyear Tire & Rubber Company (GT 0.72%) during the third quarter. The transaction involved nearly 10.3 million shares and is estimated at $106.29 million based on quarterly average pricing. The fund reported no remaining position in Goodyear as of September 30.
What Else to Know
Top holdings after the filing:
- NASDAQ: RUN: $231.8 million (18.5% of AUM)
- NYSE: RBLX: $148.9 million (11.9% of AUM)
- NYSE: ZETA: $144.1 million (11.5% of AUM)
- NYSE: SN: $129.9 million (10.4% of AUM)
- NASDAQ: VRNS: $99.1 million (7.9% of AUM)
As of Friday, shares were priced at $7.57, down 19% over the past year and far underperforming the S&P 500's 14% gain in the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of Friday) | $7.57 |
| Market Capitalization | $2.2 billion |
| Revenue (TTM) | $18.3 billion |
| Net Income (TTM) | ($1.7 million) |
Company Snapshot
- Goodyear produces and sells tires for automobiles, trucks, buses, aircraft, motorcycles, off-road, and industrial vehicles, as well as related products and services.
- The company generates revenue through manufacturing, distribution, and retail sales of branded and private-label tires, retreading, and automotive services via a global dealer and retail network.
- It serves a diversified customer base, including independent dealers, regional distributors, commercial fleets, and end consumers worldwide.
The Goodyear Tire & Rubber Company is a leading global tire manufacturer with a broad product portfolio and a presence in multiple end-markets. The company leverages its extensive distribution network and established brand portfolio to drive sales across consumer and commercial segments. Scale, brand recognition, and vertical integration provide competitive advantages in a cyclical and competitive industry.
Foolish Take
Greenvale Capital’s full exit from Goodyear marks a decisive retreat from a company in the midst of a sweeping turnaround. The London-based fund liquidated 10.25 million shares in the third quarter, a sizable divestment that came just before Goodyear’s latest quarterly report revealed progress under its “Goodyear Forward” restructuring plan but continued financial strain.
The November 3 earnings release showed third-quarter net sales of $4.6 billion and an adjusted net income of $82 million, though the company reported a headline net loss of $2.2 billion due to large non-cash charges, including a $1.4 billion deferred tax allowance and $674 million in goodwill impairments. Notably, Goodyear completed $2.2 billion in asset divestitures, including its chemical business and Dunlop brand, to accelerate deleveraging.
For Greenvale, which remains concentrated in high-growth consumer and tech names such as Sunrun and Roblox, the Goodyear sale might reflect a rotation away from cyclical industrials into higher-return segments. The tiremaker’s divestitures may strengthen its balance sheet, but with earnings falling year-over-year, long-term investors might want to see evidence of sustainable earnings growth before buying or re-engaging.
Glossary
13F assets under management: The total value of securities a fund manager reports to the SEC on quarterly Form 13F filings.
Stake: The ownership interest or investment a fund or individual holds in a particular company.
Position: The amount of a specific security or asset held by an investor or fund at a given time.
Quarterly average pricing: The average price of a security over a specific quarter, used for estimating transaction values.
Assets under management (AUM): The total market value of assets that an investment firm manages on behalf of clients.
Trailing twelve months (TTM): The 12-month period ending with the most recent quarterly report.
52-week high: The highest price at which a security has traded during the previous 52 weeks.
Vertical integration: A company's ownership and control over multiple stages of its supply chain, from production to distribution.
Retreading: The process of refurbishing used tires by replacing worn tread, extending their usable life.
Dealer and retail network: The system of authorized sellers and stores through which a company distributes its products to customers.
End consumers: The final users who purchase and use a product, as opposed to intermediaries or resellers.
