A New York asset manager has just taken advantage of the weakness of the Goodfood Market on the stock market to massively buy shares in the Montreal online grocer.
Posted at 11:00 a.m.
Phoenician Capital has more than doubled its investment in Goodfood over the past two months to start January with more than 9.3 million shares of Goodfood in its portfolio, the equivalent of a stake of more than 12% in the company. .
Phoenician Capital is now Goodfood’s largest institutional shareholder ahead of edō Capital, a private seed capital fund with a 9% stake.
Phoenician’s recent purchases of Goodfood shares are revealed in a document filed with the stock market authorities this week. It is also specified that depending on the evolution of various factors, Phoenician could possibly request changes (composition of the board, management team, etc.).
Goodfood’s stock lost 66% of its value in 2021, after having had an exceptional stock market year in 2020. The stock market decline was notably explained by wage inflation, rising food prices, costs related to development of the online offer as well as the relaxation of sanitary measures before the arrival of the Omicron variant.
It was not possible to speak to a representative of Phoenician Capital on Wednesday. However, a person familiar with the investment strategy of Goodfood’s major institutional shareholders points out that the stock is currently priced as if the ready-to-cook meals business is in permanent decline and the online grocery business is non-existent.
“The current stock price provides investors with free online grocery business and ready-to-cook meal business at a discounted price,” said the person who cannot be named because he is not authorized to speak publicly. .
“We have an excellent relationship with Phoenician Capital,” said Goodfood boss Jonathan Ferrari.
“They support the strategy and the management team, and are patient, long-term investors who believe in Goodfood’s mission which, if executed successfully, could lead to the share price rising against the market. current level, ”he explains.
“The size of their investment demonstrates that they believe Goodfood can become a leader in on-demand delivery, which is a multi-billion dollar opportunity for Goodfood. “
While some investors have feared share price volatility, the Phoenician team is focused on the successful execution of the underlying business, the cult following of our thousands of grocery products, as well than the game-changing potential of the on-demand network we’re building across Canada.
Jonathan Ferrari, owner of Goodfood
Asked if Phoenician has made any specific requests, Jonathan Ferrari replies that he is a passive investor (no seats on the board of directors or special voting rights). “We interact with them regularly,” he says.
Although expanding the online grocery business will be Goodfood’s main growth avenue for the next few years, investors lack information to measure progress in this market segment, believes analyst Martin Landry, at Stifel/GMP. “That’s why little value is given to it. “
It could be some time before the company’s success is reflected in financial results and profitability, he said. “As a result, investors’ patience could be tested,” he said in a report released this week.
Market Goodfood will unveil its year-to-date results next Tuesday and will also hold its annual meeting of shareholders on the same day. This assembly will obviously be held virtually because of the pandemic.
Valued at approximately $35 million, the investment in Goodfood is the second largest investment held by Phoenician Capital. His big investment is in goeasy, a fintech of Mississauga, Ontario.
Goodfood shares gained 2% on Wednesday to close at $3.66 on the Toronto Stock Exchange. At its peak last year, the title was worth fifteen dollars.