Petmed Express Stock Jumps On Buyout Offer From Largest Shareholder Silvercape Investments

• The pet healthcare provider has been facing declining sales and heightened competition from the likes of Chewy and Amazon for some time.
• It also launched an internal investigation after a whistleblower complaint regarding the timing of revenue recognition and specific autoship orders.
• SilverCape holds a 12.28% stake in the company.

Petmed Express (PETS) stock jumped over 51% in early trading on Thursday after its largest shareholder, SilverCape Investments, sent a non-binding proposal to buy the company for $4 per share in cash.

"We believe the company would be best positioned as a private company, and we are prepared to attribute significant value to the Company's brand and licenses, and to work with the current leadership team to execute on a transaction to leverage these assets," SilverCape Managing Director Peter Kennedy said in a letter.

The company said the deal would be funded with cash on hand at SilverCape and would not be subject to any financing conditions or contingencies. SilverCape holds a 12.28% stake in the company.

Offer Comes Amid Recent Troubles

The pet healthcare provider has been facing declining sales and heightened competition from the likes of Chewy and Amazon for some time. It has also curbed marketing spend, which has affected its capabilities to add new users.  

It also launched an internal investigation after a whistleblower complaint regarding the timing of revenue recognition and specific autoship orders. The firm later stated that its fiscal 2023 and 2024 earnings could not be relied upon, which eventually led to the ouster of both the company's CEO and CFO.

What Are Stocktwits Users Thinking?

Retail sentiment on Stocktwits about Petmed was in the 'extremely bullish' territory at the time of writing.

“Audit mess + lawsuits, but someone wants to buy the entire company anyway. Expect volatility,” one user wrote.

Petmed stock has fallen by over 47% this year.

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