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HeadHunter Could Be Impacted By Lockup Expiration

Nov. 01, 2019 12:21 PM ETHeadHunter Group PLC (HHR)
Don Dion profile picture
Don Dion


  • When the HHR IPO lockup expires on November 5th, pre-IPO shareholders and company insiders will be able to sell more than 31 million shares of currently-restricted stock.
  • The number of restricted shares dwarfs the 18.75 million shares offered in the IPO.
  • Significant sales of restricted stock could flood the secondary market and cause a sharp, short-term dip in share price.
  • Looking for more stock ideas like this one? Get them exclusively at IPO Insights. Get started today »

When the lockup period ends for HeadHunter Group (NASDAQ:HHR) on November 5th, the company's pre-IPO shareholders and company insiders will be able to sell more than 31 million shares of currently restricted shares. This number dwarfs the 18.75 million shares offered in the IPO.

(Source: F-1/A)

Significant sales of currently-restricted stock could flood the secondary market and send shares sharply lower in the short term when the lockup expires. Aggressive, risk-tolerant investors should consider shorting shares of HHR ahead of the IPO lockup expiration on November 5th.

Currently, HHR trades in the $17 to $18 range and has a return from IPO of 29.3%.

Business Overview: Executive Recruitment Company Based in Moscow, Russia

HeadHunter Group LLC operates an online platform that provides recruitment services to job seekers and employers. Recruiters and employers have paid access to the platform's curriculum vitae (CV) database, which contains resumes from job seekers. The online platform offers a job postings function as well as value-added services for both employers and job seekers.

(Source: Company Website)

The company notes in its SEC filings that 86% of the platform's traffic was free as of November 2018, and its site is the third most visited employment website worldwide as of January 2019. Their CV database contained 36.2 million CVs as of December 2018, and the company acquired Job.ru in January 2018. In December 2018, the platform hosted a daily average of 559,000 job postings, which is a significant increase from 344,000 job postings in 2016. It had 20 million unique visitors per month in 2018, which is an increase from 16.7 million unique visitors per month in 2016. HeadHunter had 253,000 paying customers at the end of December 2018.

HeadHunter Group has mobile applications as well to access the mobile marketplace. Their apps have been downloaded approximately 15.3 million

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This article was written by

Don Dion profile picture
Don Dion is the CEO of Inland Management, a company focused on acquiring, subdividing, developing and marketing large tracts of land on the fringes of major metropolitan markets. Inland Management has sold land in all 48 contiguous states totaling billions of dollars. As CEO, Don is responsible for helping to maintain and enhance the firm’s strong financial position and identifying opportunities for growth. In addition to his role at Inland Management, Don Dion is the Chief Investment Officer of DRD Investments, LLC. Based in Naples, FL. and Williamstown, MA., DRD Investments is a family office focused on managing a long/short hedge fund, real estate, venture capital and various other financial assets for the Dion family. Don also serves as the trustee of the Dion Family Foundation, which focuses on helping individuals with tuition assistance at Catholic Institutions for grammar school, high school, and college education. The foundation also helps individuals by supporting Massachusetts General Hospital. Don is on two leadership boards and advisory committees at Massachusetts General Hospital and the Home Base Program (a partnership between Mass General and the Red Sox Foundation). He consults with Saint Dominic's Academy and serves as a trustee of Saint Michael’s College. Previously, Don was the founder and CEO of Dion Money Management, a fee-based investment advisory firm for affluent individuals, families and non-profit organizations. Founded in 1996 and based in Williamstown, MA. and Naples, FL., Dion Money Management managed approximately one billion in assets for clients in 49 states and 11 countries. While at Dion Money Management, Don was responsible for setting investment policy, creating custom portfolios, and overseeing the performance of client accounts. Don sold the firm to NYC-based Focus Financial Partners (FOCS) on September 1, 2007 and no longer manages money for other families or institutions. Don remains a shareholder of Focus Financial Partners (FOCS). Don is also the retired publisher of the Fidelity Independent Adviser family of newsletters, which provided a broad range of investor commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With nearly 100 thousand subscribers in the United States and 29 other countries, Fidelity Independent Adviser published two monthly newsletters and one weekly newsletter. The flagship publication, Fidelity Independent Adviser, was published monthly for 16 years and reached over 60,000 subscribers. In 2011 Don and his daughter Carolyn co-authored the Ultimate Guide to ETFs, available on Amazon.com. Prior to founding Dion Money Management, Don co-founded Litchfield Financial Corp. (LTCH) with Summit Partners. Don served as Chairman and CEO of Litchfield, which was listed on the Nasdaq in 1992 and acquired by Textron Corp. (TXT) in 1999. Don was also the Executive Vice President, CFO and General Counsel for Patten Corporation (BGX) from 1986 to 1988, where he played a critical role in the company’s successful initial public offering on the New York Stock Exchange. From 1983 to 1985, Don was a corporate lawyer with the Boston Law Firm of Warner and Stackpole. Before joining Warner and Stackpole, Don worked as a C.P.A. for Ernst and Young from 1979 to 1983. Don graduated with honors from Saint Michael’s College in 1976 with a B.S. degree in Economics and Business Administration. He received his J.D. from the University of Maine Law School in 1979 and his LL.M. from Boston University Law School in 1982. Don can be reached at donalddion@gmail.com

Analyst’s Disclosure: I am/we are short HHR. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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