AUBURN HILLS, Mich.—Robert G. Brown, a significant shareholder of SPAR Group, Inc. (NASDAQ:SGRP), recently sold shares of the company, according to a filing with the Securities and Exchange Commission. The transactions, which took place on October 17 and 18, involved the sale of 165,153 shares of common stock at prices ranging from $2.40 to $2.42 per share, totaling approximately $396,421.
Following these transactions, Brown holds 2,568,446 shares directly. Additionally, he has indirect holdings through Innovative Global Technologies LLC and SPAR Business Services, Inc., amounting to 3,000,000 and 1,035,538 shares, respectively. Notably, some shares are also owned by his wife, Jean Brown, and are included in the total beneficial ownership.
In other recent news, SPAR Group, a global merchandising and marketing services provider, has announced its proposed acquisition by Highwire Capital, an investment firm. The all-cash transaction, unanimously approved by SPAR Group's Board of Directors, values the company at $2.50 per share. Upon completion, SPAR Group will become a privately-held entity and its shares will cease trading on NASDAQ.
However, Apollo Technology Capital Corp., a shareholder in SPAR, has expressed intentions to vote against this transaction citing concerns about Highwire's ability to secure financing and potential risks to SPAR if the deal falls through. Apollo Capital has urged the SPAR Board to provide complete and fair disclosure about Highwire's proposed financing and SPAR's closing balance sheet cash expectations.
These recent developments mark a significant turning point for SPAR Group as it navigates its future growth initiatives. The final outcome of the merger remains uncertain due to the concerns raised by Apollo Capital. The acquisition is expected to be completed in the fourth quarter of 2024, subject to approval by SPAR Group's shareholders and regulatory approvals.
InvestingPro Insights
Recent insider selling by Robert G. Brown comes at a time when SPAR Group, Inc. (NASDAQ:SGRP) is experiencing mixed financial signals. According to InvestingPro data, SGRP's market capitalization stands at $56.39 million, with a notably low P/E ratio of 4.49, suggesting the stock may be undervalued relative to earnings.
InvestingPro Tips highlight that SGRP has seen a "high return over the last year" and a "large price uptick over the last six months." This is corroborated by the impressive year-to-date price total return of 137.13% as of the latest data. Despite this strong performance, analysts anticipate a sales decline in the current year, which could explain Brown's decision to sell a portion of his holdings.
The company's financial health appears stable, with InvestingPro Tips noting that "liquid assets exceed short term obligations" and SGRP "operates with a moderate level of debt." However, investors should be aware that SGRP "suffers from weak gross profit margins," which could impact future profitability.
For a more comprehensive analysis, InvestingPro offers 7 additional tips that could provide further insight into SGRP's financial outlook and investment potential.
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