Why Farfetch Stock Blasted 21% Higher Today
Farfetch Limited (NYSE: FTCH) stock had quite the turn on the runway on Wednesday. On a generally unexceptional day for the broader market, shares of the online luxury fashion specialist rocketed more than 21% skyward. Investors very much liked the look of the company's new acquisition.
Farfetch announced that it has acquired 47.5% of e-commerce luxury fashion retailer Yoox Net-a-Porter (YNAP) in a somewhat complicated transaction. The company's owner, Switzerland-based Richemont, sold that large stake to Farfetch, plus a far smaller one (at just over 3%) to privately held investment firm Symphony Global.
That's the first stage of the deal. For this phase, Farfetch is to pay 53 million to 58.5 million of its class A ordinary shares (anywhere from 10% to 13% of its issued share capital). On the fifth anniversary of the completion of this stage, Richemont is to be paid an additional $250 million, most likely in the same securities. The seller will also make available a committed, $450 million credit facility to YNAP for a period of 10 years.
Source Fool.com
