Shares of Funko (FNKO 1.78%) slumped on Tuesday after the pop culture consumer products company announced a secondary offering by selling shareholders. The stock was down about 11.9% at 1:20 p.m. EDT.
Under the offering, 4 million Class A shares will be sold by existing shareholders, with Funko not receiving any proceeds from the sale. JPMorgan is the sole underwriter for the offering.
Shareholders participating in the offering include ACON, which owns 54.5% of Class A shares, and Funko CEO Brian Mariotti, who owns 10% of Class A shares. After the offering, ACON's and Mariotti's Class A stakes will be reduced to 45.7% and 8.6%, respectively.
Insider selling isn't always a bad thing -- there are many reasons a large shareholder may be looking to unload some stock. However, the market seems to be interpreting this move as a sign that the company's largest shareholders have grown a bit more pessimistic on the stock's potential upside.