Papa John’s International (NASDSAQ: PZZA), or at least it’s founder, has had a history of getting in trouble with the press.
John Schnatter, the man who founded the pizza chain as well as a former executive who stepped down under media pressure back in 2018, still owns a significant portion of the company’s stock. According to a form filed with the Securities and Exchange Commission, however, it seems that he’s liquidating his stake in his own company.
The former executive filed a form that disclosed he “has solicited the advice of financial advisers regarding the possible disposition of all or some of his Common Stock in the Issuer.” Overall, Schnatter owns a 31 percent stake in Papa John’s, or just under 10 million shares. Around 9.35 million of those shares are in the form of stock options or stock owned by his foundation or his wife.
As it turns out, Schnatter said he sold 314,144 shares of the company for a $16.2 million payout. While this is only a portion of his total ownership in the company, representing around 3.4 percent of his personal account.
Speculators have already taken this announcement as a possible push to short the stock on Monday’s trading session. Neither Papa John’s nor Schnatter responded to requests for a comment on the stock sale.
Papa John had a rough year in 2018 when the companies stock lost roughly one-third of their market value due to some off-hand racial remarks made by Schnatter. According to The Wall Street Journal, John Schnatter resigned from his position as board chairman as well as admitting that he made some inappropriate comments.
He also stepped down from his using in the board of trustees at the University of Louisville at the time of the scandal, a role that he’s had since 2017 after his long history of support at the university.
Shares of the company fell from $53.60 in mid-July down to $38.94 in August. Over the next few months, shares recovered and surpassed their previous 2018 highs before plummeting downwards in an even more speculator crash in December and January. Dropping from just under $60 per share down to $38.51, the company has had a turbulent and volatile history that has given traders plenty of opportunities to profit.
Whether or not this announcement could be the catalyst to another downtrend is stock price is yet to be seen. At the moment, analysts are bullish on the company with five experts having “buy” ratings for the stock with only three having a “hold” rating.
Papa Johns Company Profile
Papa John’s operates or franchises thousands of pizza delivery and carryout restaurants globally. North American franchisees operate more than half of the company’s total restaurants and pay a 5% royalty on sales to the company.
In the United States, franchisees can purchase all necessary ingredients through the company’s Quality Control Center segment. Outside the United States, franchisees or other third parties operate most Quality Control Centers to sell ingredients to restaurants.
Most company revenue occurs within the United States, with company-owned United States restaurants and the United States Quality Control Center accounting for over three quarters of total company revenue. – Warrior Trading News