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Why Shares of Funko Are Down Today

By Timothy Green – Sep 17, 2019 at 2:10PM

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Major shareholders plan to unload some stock.

What happened

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.

So what

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.

A black chart with blue numbers and a white down arrow in the middle.

Image source: Getty Images.

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.

Now what

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.

Timothy Green has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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