SAN FRANCISCO—Garrett Smallwood, the Chief Executive Officer of Wag! Group Co. (NASDAQ:PET), recently sold 34,746 shares of the company's common stock, according to a filing with the Securities and Exchange Commission. The shares were sold at a price of $0.17 each, amounting to a total transaction value of $5,906.
The filing indicates that these sales were not discretionary trades by Smallwood. Instead, they were part of a "sell to cover" transaction mandated by the company's incentive plans to satisfy tax withholding obligations related to the vesting of restricted stock units (RSUs).
Following this transaction, Smallwood retains direct ownership of 1,036,573 shares of Wag! Group Co.
In other recent news, Wag! Group Co. experienced a downgrade in its stock rating from Buy to Hold by an analyst at Craig-Hallum, following disappointing third-quarter financial results. The company's revenue fell to $13.2 million, a 39% decrease from the previous year, and an adjusted EBITDA loss of $1.9 million was reported. This underperformance was attributed to changes in Google (NASDAQ:GOOGL)'s algorithm and inefficient marketing strategies, particularly affecting the Wellness segment.
In response to these developments, Wag! has taken steps to reduce its debt, which stands at $19 million against $8 million in cash. The company has expressed interest in selling strategic assets, including Dog Food Advisor and Cat Food Advisor websites, to improve its financial position. Additionally, the company is diversifying its marketing strategy by increasing its advertising spend on platforms like Meta (NASDAQ:META), TikTok, and Amazon (NASDAQ:AMZN).
The company's Q4 revenue is projected to range between $15 million and $18 million, with adjusted EBITDA expected to fall between a $0.5 million loss and a $0.5 million profit. Furthermore, the company has set full-year 2024 revenue guidance at $70 million to $73 million. These are the latest developments in Wag!'s efforts to navigate the changing digital landscape and return to profitability.
InvestingPro Insights
Wag! Group Co.'s recent stock performance and financial metrics provide additional context to CEO Garrett Smallwood's recent share sale. According to InvestingPro data, the company's stock has experienced significant declines across various time frames. Most notably, PET has seen a 77.72% drop in the past month and an 88.98% decline over the past year, reflecting substantial investor pessimism.
The company's financial health also appears precarious. An InvestingPro Tip highlights that Wag! is "quickly burning through cash," which could be a concern for investors given the current market conditions. Additionally, the company's revenue growth has been negative, with a 3.19% decline in the last twelve months as of Q3 2024.
Despite these challenges, Wag! maintains an impressive gross profit margin of 77.9%, suggesting strong pricing power in its core business. However, this hasn't translated to bottom-line profitability, as another InvestingPro Tip indicates that analysts do not anticipate the company will be profitable this year.
For investors seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for Wag! Group Co., providing a deeper understanding of the company's financial position and market performance.
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