Form 4: KKR Sells AppLovin Shares, Converts Class B Stock to Class A

KKR Group Partnership L.P. reports the conversion of Class B common stock to Class A common stock and the sale of AppLovin Corp shares.

Summary

• KKR Group Partnership L.P. converted 16,000,000 shares of Class B common stock of AppLovin Corporation into an equal number of shares of Class A common stock on March 6, 2024.
• KKR also sold 19,866,397 shares of Class A Common Stock at a price of $54.46 per share.
• Additionally, there were in-kind distributions of shares by KKR Denali Holdings L.P. to its partners and shareholders, intended for charitable donations.
• George R. Roberts and Henry R. Kravis donated shares received from these distributions.
• Following these transactions, KKR continues to hold a significant number of AppLovin shares indirectly.
• The reporting persons disclaim beneficial ownership of the securities except to the extent of their pecuniary interest.

Sentiment

Score: 5

Explanation: Neutral sentiment. The sale of shares could be seen as slightly negative, but the conversion and charitable donations offer a mixed view. It's a standard transaction for a firm like KKR.

Positives

• The in-kind distributions for charitable donations could be viewed positively.

Negatives

• The sale of a significant number of shares by KKR could be interpreted negatively by the market.

Risks

• Continued sales of large blocks of shares by major holders like KKR could put downward pressure on the stock price.
• The market's reaction to KKR reducing its stake in AppLovin is uncertain.

Industry Context

Private equity firms like KKR often hold significant stakes in publicly traded companies and periodically adjust their holdings. This sale and conversion are part of KKR's ongoing portfolio management.

Comparison to Industry Standards

• KKR's actions are similar to other private equity firms that monetize their investments in portfolio companies over time.
• Blackstone and TPG are examples of firms that have also reduced their stakes in publicly listed companies after an initial holding period.
• The size and timing of these transactions are often dictated by market conditions and the firm's investment strategy.

Stakeholder Impact

• Shareholders may react to the sale of shares by KKR.
• The charitable donations benefit the recipient organizations.

Key Dates