In a recent move, insiders at Funko, Inc. (NASDAQ:FNKO), a company known for its pop culture collectibles, have executed a substantial stock sale. On July 16, 2024, a total of 2,000,000 shares of Class A Common Stock were sold at a price of $8.9 per share, amounting to a transaction value of $17.8 million.
The shares were sold indirectly by Working Capital Advisors (UK) Ltd., Working Capital Management Pte. Ltd., and Hsiang-Tze Kenneth Chan, who is associated with both entities. According to the footnotes in the filing, the shares are held indirectly through High Street Partners, Ltd. and Working Capital Partners, Ltd., with Working Capital Advisors (UK) Ltd. acting as the investment manager to both. Working Capital Management Pte. Ltd. is the sole owner of the investment manager, and Kenneth Chan is the sole owner of the parent company.
Following the transaction, the reporting owners collectively still have indirect ownership of 5,129,838 shares of Funko's Class A Common Stock. This includes 2,849,431 shares held directly by Working Capital Fund and 2,280,407 shares held directly by High Street.
The sale was disclosed in a Form 4 filing with the Securities and Exchange Commission, with signatures from representatives of Working Capital Advisors (UK) Ltd. and Working Capital Management Pte. Ltd., as well as from Kenneth Chan himself. This transaction represents a significant change in the ownership structure of the company, and it is noteworthy for investors who track insider trading activities as an indicator of corporate confidence and market movements.
In other recent news, Funko has been receiving positive attention from analysts at DA Davidson and B.Riley, following strong Q1 earnings and the appointment of a new CEO, Cynthia Williams. DA Davidson raised their price target for Funko shares from $10.50 to $12.00, while B.Riley increased their target from $12.00 to $13.00. Both firms maintain a 'Buy' rating on the stock. This optimism stems from Williams' positive impressions of the company's operations and her plans for future growth.
Funko reported strong Q1 net sales of $216 million and an adjusted EBITDA of $10 million, maintaining their 2024 financial outlook with expected net sales between $1.047 billion and $1.103 billion, and an adjusted EBITDA between $65 million and $85 million. The new CEO's focus on direct-to-consumer sales and international expansion is seen as a positive direction for the company.
Furthermore, Funko's upcoming video game, Funko Fusion, set to release on September 13, has contributed to the analysts' positive stance. The firm has adjusted its price-to-earnings (P/E) ratio target for Funko to 23 times, up from 20 times, based on projected earnings per share (EPS) of $0.52 for the year 2025. These are some of the recent developments for Funko.
InvestingPro Insights
Amidst the insider trading activity at Funko, Inc. (NASDAQ:FNKO), it's crucial for investors to consider the company's financial health and market performance. According to recent data, Funko's market capitalization stands at approximately $497.4 million. Despite a challenging period reflected by a negative price-to-earnings (P/E) ratio of -3.74, the company has demonstrated resilience with a strong return over the last three months, posting a 62.52% price total return.
Investors should note that while Funko has faced revenue declines, with a -16.3% change over the last twelve months as of Q1 2024, the company's gross profit margin remains substantial at 32.86%. This suggests that despite lower revenues, Funko has been able to maintain a relatively high level of profitability on the products it sells. Additionally, an InvestingPro Tip highlights that three analysts have revised their earnings upwards for the upcoming period, which may signal potential improvements in Funko's financial outlook.
However, challenges remain, as indicated by another InvestingPro Tip pointing out that Funko's short-term obligations currently exceed its liquid assets. This could imply potential liquidity issues that the company may need to address. Furthermore, the company does not pay dividends, which might influence investment decisions for those seeking income-generating stocks.
For investors looking to delve deeper into Funko's financials and market prospects, there are additional InvestingPro Tips available, offering a comprehensive analysis of the company's performance and future potential. To explore these insights and make informed investment decisions, consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at InvestingPro.
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