Revolut Share Sale: What Is A Share Sale And How Does It Work?

Business

Revolut has announced a secondary share sale, valuing the company at $75 billion. This strategic move allows employees to sell up to 20% of their vested shares to new and existing investors without creating new shares. The shares will be transferred at a fixed price of $1,381.06 per share.

Understanding Secondary Share Sales

A secondary share sale involves the sale of existing shares by shareholders, such as employees or early investors, to other investors. Unlike primary share sales, no new capital is raised as the company does not issue new shares.

Implications for Revolut

The secondary share sale benefits various stakeholders:

• Employees: This sale provides an opportunity to liquidate vested shares, offering financial returns for long-term contributions to the company.
• Investors: New investors can acquire shares without waiting for an initial public offering (IPO), while existing investors can adjust their holdings.
• Company: Revolut facilitates share transfers without the complexities of a new funding round, allowing continued focus on business growth.

Comparison: Share Sale vs. Buyback

A share sale involves the transfer of shares between shareholders, with the company’s role limited to administrative facilitation. In contrast, a buyback occurs when a company repurchases its own shares, usually to consolidate ownership.

Potential Path to IPO

While some speculate about Revolut’s IPO plans, the secondary share sale does not directly indicate an imminent public offering. Previously, Revolut’s founder suggested a preference for a New York IPO over a London listing, although no definitive timeline has been provided.

Conclusion

Revolut’s secondary share sale marks a significant milestone for the company, providing liquidity options for employees and investment opportunities for investors. The impact on Revolut’s future, including any potential IPO, remains to be seen.