Insiders Looking to Dump Michael Kors for Huge Profit


If you made as much money in shares of luxury apparel and accessories-maker Michael Kors Holdings Ltd. (NYSE: KORS) as the insiders have, chances are high that you would want to lock in at least some of your profits. Well, certain shareholders are doing just that.

Michael Kors shares are trading lower after an SEC Filing from Friday evening disclosed that certain shareholders and insiders are now going to sell up to 23 million shares of common stock in a registered secondary offering. Morgan Stanley, J.P. Morgan Securities and Goldman Sachs will act as joint book-running managers for this secondary offering.

The company had roughly 199.4 million shares outstanding as of the end of last quarter, so this is a substantial boost to the free float here. The formal offering will be 20 million ordinary shares and the overallotment option of 3 million shares will bring the total up to 23 million if that overallotment option is exercised.

Kors was a hot IPO that made its debut in December of 2011. The company sold 47.2 million shares at $20.00, and that generated a market cap of about $3.8 billion at the time. Founder Michael Kors sold some 5.8 million shares in the IPO and the rest of the shares were also sold by insiders rather than on behalf of the company.

What was interesting was that Michael Kors was supposed to only be 41.7 million shares in a range of $17 to $19 per share. The stock has only traded as low as $23.51 since its IPO and the stock's closing price of $56.03 on Friday compared to a high since the IPO of $56.70.

With this stock have much more than doubled, it is not that difficult to imagine why insiders and shareholders from before the IPO would want to take more chips off of the table. Yahoo! Finance showed that the market cap as of Friday was almost $10.8 billion.

Michael Kors shares are lower by almost 5% at $53.50 but shares had been down as much 6% earlier this morning.


Filed under: 24/7 Wall St. Wire, IPOs, IPOs & Secondaries, Retail Tagged: KORS