What happened
European electric vehicle (EV) start-up Arrival (ARVL 10.00%) was departing from plenty of investor portfolios on Monday. The company's share price fell by over 5%, on a generally good day for the stock market overall. News of a big share sale by a top investor in the company was the catalyst for the downward move.
So what
Arrival, a relatively small player in the expanding EV market, disclosed on Monday that said investor is selling up to 250 million Arrival shares. The news comes several days after the EV maker divulged that it sold $25 million in newly issued stock to that investor, Antara Capital Master Fund, and held an option to sell up to $25 million more. It also exchanged nearly $122 million worth of convertible debt held by Antara into equity.
Antara is selling 125 million shares, its partner said. This essentially matches the initial stock position Arrival sold to the company. Antara could also opt to sell an additional 125 million, depending on whether (and to what degree) Arrival decides to exercise its option.
Arrival stressed in its disclosure that it will not receive any of the proceeds of Antara's sale, although it admitted it is to pay the expenses related to the divestment.
Now what
According to statistics compiled by Yahoo! Finance, Arrival currently has just over 639 million shares outstanding. So even if the company doesn't exercise its option to mint and immediately sell new shares to Antara at all, a significant pile is about to hit the market thanks to Antara's divestment. This might be a stock worth avoiding for now.
