Xanadu Quantum Technologies Ltd. (NASDAQ:XNDU) is trending Friday after shares plunged earlier this week when the company’s standard 180-day post-IPO lockup period expired, freeing a large block of shares for trading, coinciding with a disclosed stock sale by CEO Christian Weedbrook.
- Xanadu stock is gaining positive traction. Why is XNDU stock advancing?
Lockup Expiration and Market Impact
Xanadu’s lockup, tied to the March 26 closing of its business combination, restricted early shareholders from selling for 180 days. Its expiration on September 22 added roughly 255 million shares to the tradable float, up from just about 43 million previously available — more than a sixfold increase in shares eligible for trading. Shares fell 21.6% that day, closing at $5.78 down from $7.37, pushing the stock’s year-to-date decline to roughly 46%. Trading volume spiked to about 35 million shares from roughly 2.2 million the prior day.
CEO Weedbrook Sells Stake, Cites Financial Planning
The same day, Weedbrook disclosed the sale of 4.6 million Class B Subordinate Voting Shares, after converting them from his Class A multiple voting shares, for aggregate gross proceeds of $32.8 million — nearly 10% of his total holdings. The sale was executed across five separate open-market transactions at prices ranging from $5.58 to $12.90 as the stock declined throughout the session.
Weedbrook told The Globe and Mail the sale was made “for personal financial planning purposes.” “The key thing for me is I’m all in. I’ve been at this over a decade, and pretty much 100% of my net worth is tied up in Xanadu,” he said, adding that he does not plan to sell any more of his remaining 41.8 million Class A multiple voting shares, which give him roughly 25% voting power.
Analysts Remain Bullish Despite the Selloff
Despite the selloff, Xanadu maintains a debt-free balance sheet with reduced cash burn and analysts hold a Strong Buy consensus with a $33 average price target. CIBC Capital Markets analyst Todd Coupland, who has a $22 price target on the stock, said in a September 1 note that Xanadu is entering a period that could produce several “technical de-risking” milestones, advising investors to “use weakness around the September 22 lockup” to buy. Shares were attempting to rebound Wednesday, trading more than 4% higher in premarket action.
Xanadu Shares Trade Higher
XNDU Price Action: At the time of publication, Xanadu shares are trading 0.20% higher at $5.11, according to data from Benzinga Pro.
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