Form 4: Apoorva Mehta Enters Prepaid Variable Forward Sale Contract for Maplebear Inc. (CART) Shares

Apoorva Mehta, a director and 10% owner of Maplebear Inc. (CART), entered into a prepaid variable forward sale contract involving 747,040 shares of common stock.

Summary

• On February 25, 2025, Apoorva Mehta, through AM Investment Holdings LLC, entered into a prepaid variable forward sale contract with an unaffiliated third-party purchaser.
• The contract obligates the LLC to deliver up to 747,040 shares or an equivalent amount of cash based on the market price on the maturity dates (May 21 and 22, 2026).
• In exchange, the LLC received a cash payment of $27,466,270.27.
• The LLC pledged 747,040 shares to secure its obligations, retaining dividend and voting rights during the term, subject to certain payments related to dividends.
• The number of shares to be delivered depends on the volume-weighted average price of the shares on the valuation date.
• If the price is less than or equal to $38.9479, all pledged shares are delivered.
• If the price is between $38.9479 and $63.2904, a fraction of the shares is delivered based on the ratio of $38.9479 to the settlement price.
• If the price is greater than $63.2904, a different fraction is used, incorporating the excess over $63.2904.
• Apoorva Mehta also directly owns 4,866,785 shares of Maplebear Inc. through stock options with an exercise price of $9.55, fully vested as of May 30, 2028.
• Following the transaction, Apoorva Mehta beneficially owns 22,413,892 shares indirectly.

Sentiment

Score: 6

Explanation: The sentiment is neutral. The transaction is a standard financial arrangement, and the impact on the company is likely minimal. The deal provides liquidity for the individual but doesn't inherently signal positive or negative prospects for the company.

Positives

• The transaction provides Apoorva Mehta with immediate cash ($27,466,270.27) while retaining voting and dividend rights on the pledged shares.
• The variable forward sale contract allows for potential upside if the share price increases above the floor price of $38.9479.
• The stock options represent a significant potential future gain if the share price appreciates substantially above the exercise price of $9.55.

Negatives

• The transaction obligates the LLC to deliver shares or cash, potentially limiting future upside if the share price increases significantly.
• If the share price remains below $38.9479, the LLC will have to deliver all 747,040 pledged shares.
• The LLC may need to make payments to the purchaser with respect to certain dividends under the terms of the contract.

Risks

• Fluctuations in the market price of CART shares could impact the number of shares or amount of cash to be delivered under the forward sale contract.
• The terms of the contract could limit Apoorva Mehta's ability to benefit fully from potential increases in the share price.
• The obligation to deliver shares or cash could create a future liquidity risk for the LLC.

Future Outlook

The number of shares or cash to be delivered under the forward sale contract will depend on the market price of CART shares on the maturity dates in May 2026.

Industry Context

Forward sale contracts are often used by significant shareholders to monetize a portion of their holdings while retaining some potential upside and voting rights.

Comparison to Industry Standards

• Prepaid variable forward contracts are a relatively common tool used by corporate insiders to diversify their holdings or raise capital without immediately selling shares on the open market.
• The specific terms of the contract, such as the floor and cap prices, are negotiated between the parties and reflect their expectations for the future performance of the stock.
• Similar transactions have been undertaken by executives at companies like Tesla and Amazon.

Stakeholder Impact

• The transaction could have a minor impact on shareholders if the sale of shares under the forward sale contract affects the stock price in the future.
• The impact on employees, customers, suppliers, and creditors is expected to be negligible.

Key Dates