01—Abstract
Summary
Summary of the 8-K filed March 4, 2024. Cited figures are marked; the original filing is the authoritative source.
AppLovin Corporation (APP) has filed an 8-K report detailing a material definitive agreement related to a secondary public offering.
On February 29, 2024, the company entered into an underwriting agreement for the sale of approximately 19.87 million shares of Class A common stock by KKR Denali Holdings L.P. (the Selling Stockholder) at a price of $56.00a per share. Importantly, AppLovin itself will not receive any proceeds from this offering.
In conjunction with the offering, AppLovin has agreed to repurchase over 10.46 million shares from the underwriters at $54.46b per share. This concurrent repurchase mechanism, alongside the Selling Stockholder's conversion of approximately 16 million shares of Class B common stock into Class A shares, suggests a strategic move to manage share dilution and potentially adjust the company's capital structure without directly raising funds. The offering and repurchase are expected to close around March 6, 2024, subject to customary conditions.
02—Key points
Key Highlights
- Secondary public offering of 19,866,397 shares of Class A common stock by Selling Stockholder (KKR Denali Holdings L.P.) at $56.00 per share.
- AppLovin Corporation will not receive any proceeds from the sale of shares by the Selling Stockholder.
- AppLovin to conduct a concurrent repurchase of 10,466,397 shares from underwriters at $54.46 per share.
- Selling Stockholder plans to convert approximately 16,000,000 shares of Class B common stock to Class A common stock prior to the offering.
- The underwriting agreement includes customary representations, warranties, covenants, and indemnification provisions.
- The offering and concurrent repurchase are expected to close on or around March 6, 2024.
- This filing primarily concerns the details and execution of a previously announced stock sale by a major stockholder, not a primary offering by AppLovin.
03—Questions
Frequently Asked Questions
Will AppLovin receive any money from this stock offering?
No, AppLovin Corporation will not receive any proceeds from this offering. The shares are being sold by the Selling Stockholder, KKR Denali Holdings L.P., and the proceeds will go to them.
What is the purpose of AppLovin repurchasing shares?
AppLovin is repurchasing shares from the underwriters as part of a concurrent transaction alongside the Selling Stockholder's sale. This action, combined with the Selling Stockholder's conversion of Class B shares, appears to be a mechanism to manage the number of shares in the public float and potentially the company's capital structure without diluting existing shareholders as severely as a pure secondary offering without a repurchase might.
Who is KKR Denali Holdings L.P. and why are they selling shares?
KKR Denali Holdings L.P. is identified as the 'Selling Stockholder' in this filing, indicating they are a significant holder of AppLovin's stock. The filing does not detail the specific reasons for their sale, but it is a common practice for large pre-IPO investors or sponsors to eventually divest portions of their holdings after a company has gone public.
What is the difference between the Class A and Class B common stock mentioned?
The filing indicates that the Selling Stockholder intends to convert approximately 16,000,000 shares of Class B common stock into an equivalent number of shares of Class A common stock for no consideration. While the specifics of AppLovin's dual-class share structure are not detailed here, typically Class B shares carry different voting rights or conversion privileges compared to Class A shares. This conversion ensures the shares sold in the offering are Class A.
04—Continue