If shareholder confidence is a sign of things to come, rocky waters may be ahead for luxury goods retailer Cettire (ASX: CTT) after its Founder and CEO cashed out $47.25 million of his shares with a pretty good idea of how their financial results for the year are going to look.
Keen investors have been conscious that CEO Dean Mintz has been the majority shareholder since Cettire listed on the ASX in December 2020 where an eventual sell down was inevitable. Such selling however, would have to wait until Mintz’s shares were released from escrow.
With his 65.9% stake of Cettire, he had the prime seat to watch Cettire’s success over the past 12 months as CTT shares reached a high of $4.80 in November 2021, just 11 months after listing on the ASX with an IPO Offer Price of $0.50 per share.
Frankly, it was an astounding rise for the online retailer which skyrocketed Mintz’s personal wealth. All the while, Mintz maintained his low-key status as a non-public figure rarely offering media appearances or shareholder engagements.
The sell down has taken place via a block trade of 35 million shares at $1.35 per share. The sell down represents 9.18% of all issued CTT shares, but is just a fraction of Mintz’s holding where he will retain 56.72% of the Company after the sale to still be Cettire’s largest shareholder.
While the $47.25m is still a huge windfall for Mintz, those same shares were valid at $168m just four months ago.
“Cettire is a huge part of my life, it has a phenomenal market opportunity and I remain fully committed to continuing to lead the Company to grow shareholder value,” said Mintz.
“The sale represents a small portion of my shareholding and I will remain Cettire’s largest shareholder. The sale enables greater trading liquidity and a broadening of the share register and I look forward to welcoming the new shareholders to the Company.”
While news of the Founder sell down saw a 13% decline in CTT shares yesterday, down to $1.345, it was probably a more difficult watch for Mintz whose shares had been locked in escrow as he watched CTT’s shares begin falling from their highs in November 2021.
Although he is now free to sell CTT shares as he pleases, Mintz is confirmed he will not be selling any more at least until Cettire releases its full year results which are expected to be released in August.
Internally, Cettire is likely to have a good idea of what the full year results will look like but if it’s in line with the wider eCommerce sector, $1.35 per share could look great for Mintz by August.
The sector decline across online retail has been led by Kogan (ASX: KGN) which reported a loss in its half year results for the first time as the retail industry has been hit hard by supply chain problems, catalysed by the pandemic. KGN shares have copped a similar battering from $13 down to $5 in the same period as Cettire’s downswing.
For the half year ended 31 December 2021, Cettire reported $113.7m in revenue which represented a 181% increase from the previous year.
A $8.3m net loss was incurred however, down from the previous year’s $2.3m net profit, attributed by the Company to their investment in growth.
Highbury Partnership acted as financial adviser for the 35 million share block trade.
In 2021, Mintz was paid a total remuneration package of $583,265.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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