Pure Storage offering at $23.75?

Can anyone discern what this Seeking Alpha blurb meant to say?

"after a 4.4M-share offering on behalf of shareholders is set to come at $23.75/share, Bloomberg reports.

Six holders have at least 4.4M shares, Bloomberg notes: BlackRock, Vanguard, Renaissance Technolo, FMR, William Blair and Alliance Bernstein."
https://seekingalpha.com/news/3368771-pure-storage-minus-1_3…

I hope Bloomberg’s report was a bit more clear, so maybe I will go check that out before I hit the “Submit Message” button.

Hmmmm, don’t see anything on this Bloomberg page for Pure. I don’t have access to a terminal, of course.
https://www.bloomberg.com/quote/PSTG:US

Was this maybe a prior convertible note offering that is simply coming due (similar to the one mentioned in the announcement linked below)?
https://investor.purestorage.com/news-and-events/press-relea…

Is this simply some dilution that was likely already included in the diluted weighted average shares count from the last quarterly report? I am thinking this isn’t actually a news item, but just a conversion event.

-volfan84

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What it means is that a big insider wants to sell, and a deal was made to guarantee a price for the shares because selling 4.4 million shares would be difficult given the usual volume.

From a practical perspective it means you might get a nice lower price if you want to buy more in the morning. The price may recover later in the day.

I make no guarantees in regard. History is not always a 100% correlation to reality, but I have seen this happen before and that is usually what happens.

Btw https://finance.yahoo.com/m/a9c2ec5b-a7e3-31ae-9abb-100e0286…

Bit of interesting reading for PSTG aficionados.

Tinker

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Is this simply some dilution…

Hi Volfan,
If it’s an offering on behalf of shareholders it’s not a dilution (as you guessed already). It’s an arranged sale from one or more existing large stockholders to someone (or someones) else.
Saul

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do we have an idea why this insider wants to sell so many at one time?

tj

do we have an idea why this insider wants to sell so many at one time?

tj

Would simply be a guess…but to put that money elsewhere would be the simplest answer. That doesn’t help any and could mean cash, buying shares of something else, buying bonds, buying treasuries, or some such.

That doesn’t help any and could mean cash, buying shares of something else, buying bonds, buying treasuries, or some such.

I think that does help. Especially since most of the sellers are institutions.

4.4 million is a lot of shares for any one institution, and a ~$100m position. But it’s less than 2% of the shares outstanding for PSTG, so I wouldn’t make a big deal about it. They gave away more shares through SBC last year. This 4.4m shares was simply a trade.

Bear

It means absolutely nothing. An insider (as Bear says could be an institution, and probably is) needs their money. The reason for it is their own and they are not going to share it with us, and it would not do us any good to know anyways, unless you want yet another institutional analyst’s opinion that is no better than any other analyst’s opinion.

Tinker

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