Why Chewy (CHWY) Stock Is Trading Lower

Chewy Inc CHWY shares are trading lower by 4.38% to $29.74 during Friday’s session after the company announced the public offering of shares by a selling stockholder and a concurrent share repurchase.

What To Know: Chewy late Thursday announced the pricing of an underwritten offering of 16,666,667 shares of its Class A common stock at $30.00 per share by its largest shareholder, Buddy Chester Sub LLC, affiliated with BC Partners.

The underwriter has a 30-day option to buy an additional 2.5 million shares. Chewy will not sell any shares or receive any proceeds from this offering.

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What Else: Additionally, Chewy will repurchase $300 million of its Class A stock from the same seller at the offering price in a separate transaction.

This repurchase, approved by Chewy’s independent board members, is separate from the company’s existing $500 million repurchase program. Upon completion, the repurchased shares will be cancelled. The offering is expected to close by September 23.

Before the offering, Chewy had about 143 million Class A shares and 275 million Class B shares outstanding. Post-transaction, it will have approximately 160 million Class A shares and 248 million Class B shares.

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How To Buy CHWY Stock

By now you're likely curious about how to participate in the market for Chewy – be it to purchase shares, or even attempt to bet against the company.

Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy ‘fractional shares,' which allows you to own portions of stock without buying an entire share. For example, some stock, like Berkshire Hathaway, or Amazon.com, can cost thousands of dollars to own just one share. However, if you only want to invest a fraction of that, brokerages will allow you to do so.

In the the case of Chewy, which is trading at $29.9 as of publishing time, $100 would buy you 3.34 shares of stock.

If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to ‘go short' a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.

According to data from Benzinga Pro, CHWY has a 52-week high of $39.10 and a 52-week low of $14.68.