The lock-up agreement with underwriters for the other company insiders to not sell shares expired on January 17, 2011. Guess which giant retailer was a big pre-IPO investor in Green Dot. Wal-Mart Stores, Inc. (NYSE: WMT) took a stake in the prepaid credit card seller and Green Dot distributes its cards at Wal-Mart. The company holds 2,208,552 shares of common stock, which comes to a 15% stake.
It is not uncommon for insiders and pre-IPO backers to continue to hold shares of companies they have invested in long after they were required to by contract. If (or when) a recession comes back to haunt us, Green Dot would be expected to win along with Wal-Mart as credit tightens and as the consumers have to start going back to Wal-Mart because they have to save money again.
For now, Wal-Mart is still a large holder of Green Dot with that 2.2 million share stake that it acquired last June. Green Dot is the exclusive provider of Walmart MoneyCards and that agreement was extended to May 2015. Wal-Mart won’t likely sell the shares until it needs leverage on Green Dot.
JON C. OGG
Contact [email protected] for any questions or corrections.
Top Gaining Stocks
Top Losing Stocks