Please ensure Javascript is enabled for purposes of website accessibility

Why Maravai LifeSciences Tumbled Nearly 12% Today

By Eric Volkman – Sep 10, 2021 at 6:34PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A private equity firm and several peers are cashing out of a pile of shares.

What happened

Maravai LifeSciences Holdings (MRVI -1.39%) stock wasn't exactly the picture of health on Friday. It fell by nearly 12%, on news that a group of selling stockholders had priced a big secondary share sale.

So what

Maravai announced that those investors are collectively unloading an even 20 million shares of the company's Class A stock for $50 apiece. These sellers are led by lead investor GTCR, a private equity firm that currently holds 21.5% of that stock and controls 65% of the company's voting power. After the sale, GTCR will retain a holding of 56.3% to 57.4% of the latter.

Stethoscope atop $100 bills and pennies.

Image source: Getty Images.

In addition, GTCR and its partner sellers have granted the deal's underwriters a 30-day option to collectively buy an additional 3 million shares. Maravai said the issue should be completed next Tuesday, Sept. 14.

That $50-per-share level is $3.35 below Thursday's closing price of the biotech stock. Investors indicated their displeasure with the sale by driving the price down to barely over $47 on Friday. According to Yahoo! Finance, the company currently has just over 114 million shares outstanding.

Maravai stressed in its announcement that since it is not the selling entity, it will receive no proceeds from the issue.

Now what

It's a good time for early Maravai investors to sell their shares. That $50-per-share level is nearly double the $27 Maravai fetched in its November 2020 IPO. Although the stock is down some from the $60-plus peak it reached this summer, a nearly 100% gain is certainly nothing to sneeze at.

Eric Volkman 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Maravai LifeSciences Holdings, Inc. Stock Quote
Maravai LifeSciences Holdings, Inc.
$14.17 (-1.39%) $0.20

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.