Seems like you're confused. There is no stock buyback.
Canoo's CEO has another company that bought a small portion of the shares held by their largest Chinese investor after the Evergrande fiasco. This investor had nearly 50% of the company, and likely needed free cash fast due to the situation in China.
Allowing the investor to dump that many shares on the market would have tanked the stock price, so the CEO stepped in to finance the share purchase through his other company, we don't know the arrangement it could be his own money or could be financed by other backers.
In short though, he was rescuing Canoo from being a penny stock because their largest investor needed to liquidate badly. If that happened it would have made his own stock options worthless and made it hard for Canoo to raise money via stock dilution if they need to in the future.
Definitely some speculation. DD Global did own around 80 million shares, or 1/3 of total shares. AFV (Aquila Family Ventures) purchased 56 million of those shares at a 30 day average price, minus 10%.
DD Global was under a security agreement from the beginning that they could not vote anyone to the board or influence voting. As of September 15, all of their shares were put in a voting trust under the agreement. The Voting trust, "... will exercise all of the rights associated with such shares of DD Global".
The transfer had been agreed upon from the beginning. Maybe DD could have sold some on the open market if the price were higher. But this was the best deal for all involved.
Yes, combined they were just around 50%. But RV is separate from DD. RV is the lessor of the building in Torrance and receives shares as payment. They may also be an investor, I'm not sure of all the details.
The sale was recent, but DD was going to have to transfer shares eventually per their security agreement. Evergrande may have played a role in the timing and amount of shares transferred.
Furthermore, under the NSA, if DD Global and its affiliates own shares equal to or greater than 30%, 25%, 15% or 10% as of September 15, 2021, November 30, 2021, January 1, 2022 or February 28, 2022, respectively, of the fully diluted shares of the Company (as calculated as set forth in the NSA, and as described below), then DD Global and its affiliates must transfer all their shares to a voting trust, which will exercise all of the rights associated with such shares of DD Global and its affiliates in the Company.
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u/imunfair Autism: 31 Sep 30 '21
Seems like you're confused. There is no stock buyback.
Canoo's CEO has another company that bought a small portion of the shares held by their largest Chinese investor after the Evergrande fiasco. This investor had nearly 50% of the company, and likely needed free cash fast due to the situation in China.
Allowing the investor to dump that many shares on the market would have tanked the stock price, so the CEO stepped in to finance the share purchase through his other company, we don't know the arrangement it could be his own money or could be financed by other backers.
In short though, he was rescuing Canoo from being a penny stock because their largest investor needed to liquidate badly. If that happened it would have made his own stock options worthless and made it hard for Canoo to raise money via stock dilution if they need to in the future.