Wayfair (W) has disclosed a new risk, in the Share Price & Shareholder Rights category.
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Wayfair faces the risk that future issuances of Class A common stock, convertible notes, or other equity-linked securities could significantly dilute existing stockholders and pressure its share price. New investors in such transactions may also obtain rights and preferences that are senior to those of current equity and note holders.
Ongoing equity-based compensation, including restricted stock units for employees and a sizable performance stock unit grant to CEO Mr. Shah, adds another layer of potential dilution as these awards vest. Even the perception of such dilution could weigh on market sentiment and adversely affect the trading price of Wayfair’s common stock.
Overall, Wall Street has a Moderate Buy consensus rating on W stock based on 15 Buys and 8 Holds.
To learn more about Wayfair’s risk factors, click here.