SCHEDULE 13D/A: QXO Inc. Major Shareholder Bradley S. Jacobs and JPE Enter 90-Day Lock-Up Agreement Ahead of Public Offering

Jacobs Private Equity II, LLC and Bradley S. Jacobs, significant shareholders of QXO, Inc., have entered into a 90-day lock-up agreement with underwriters in connection with a forthcoming public offering of the company's common stock.

Summary

• Jacobs Private Equity II, LLC (JPE) and Bradley S. Jacobs (Reporting Persons) have filed Amendment No. 4 to their Schedule 13D for QXO, Inc.
• The Reporting Persons beneficially own an aggregate of 394,218,132 shares of QXO, Inc. Common Stock, representing 49.0% of the class.
• This ownership includes 900,000 shares of Preferred Stock, which are initially convertible into 197,109,067 Common Shares at an initial conversion price of $4.566.
• It also includes 197,109,065 Warrants, initially exercisable for Common Shares at varying prices: 50% at $4.566, 25% at $6.849, and 25% at $13.698.
• On April 16, 2025, JPE and Jacobs entered into lock-up agreements with Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC, acting as underwriters for a public offering of QXO's Common Stock.
• The lock-up agreement restricts the Reporting Persons from selling, pledging, or transferring their shares or related securities for a period of 90 days following the date of the final prospectus for the public offering.
• Customary exceptions apply to the lock-up, including transfers as bona fide gifts, to immediate family members or trusts, distributions to limited partners/members/stockholders, transfers by will or operation of law, transfers to affiliates or investment funds, repurchases by the company upon employment termination, cashless/net exercise for tax obligations, transfers pursuant to a change of control tender offer/merger, establishment of Rule 10b5-1 trading plans (without transfers during the restricted period), and pledges for bona fide loans (with a loan-to-value ratio not exceeding 50%).

Sentiment

Score: 7

Explanation: The sentiment is moderately positive as the lock-up agreement signals progress towards a public offering, which is typically a positive event for a company seeking capital. It also shows commitment from major shareholders. However, it's a procedural filing, not a performance update, so the positive impact is limited to the capital raise context.

Positives

• The lock-up agreement demonstrates commitment from significant shareholders (JPE and Bradley S. Jacobs) to the success of the upcoming public offering by restricting their ability to sell shares for 90 days.
• The agreement is a standard practice in public offerings, indicating progress towards the completion of QXO, Inc.'s capital raise.

Negatives

• The lock-up agreement restricts the liquidity of the Reporting Persons' significant holdings for the specified period.

Risks

• The lock-up agreement includes a provision that allows for the pledge of shares as collateral for bona fide loans, provided the loan-to-value ratio does not exceed 50%, which could introduce a risk of forced sales if loan terms are breached.
• The effectiveness of the lock-up in preventing market overhang depends on the successful completion of the public offering and adherence to the agreement's terms.

Future Outlook

The filing indicates an upcoming public offering of QXO, Inc. Common Stock, with a lock-up period for significant shareholders extending 90 days after the final prospectus date, suggesting a near-term capital raise event.

Industry Context

This filing is a standard regulatory disclosure related to a significant shareholder's holdings and their agreement to a lock-up in anticipation of a public offering. Such lock-up agreements are common practice in capital market transactions, particularly for companies undergoing an IPO or a significant secondary offering, to stabilize the stock price post-offering by preventing immediate sales by large holders.

Comparison to Industry Standards

• Lock-up agreements are standard practice in public offerings across industries, typically ranging from 90 to 180 days. The 90-day period for QXO, Inc.'s significant shareholders (Jacobs Private Equity II, LLC and Bradley S. Jacobs) is at the shorter end of this typical range but is not unusual.
• Specific comparable companies or projects are not mentioned in the document, as this filing focuses on a shareholder's agreement rather than operational or financial performance benchmarks.

Stakeholder Impact

• Shareholders: The lock-up agreement by significant shareholders may instill confidence by reducing immediate selling pressure post-offering. The public offering itself will dilute existing shareholders but provide capital to the company.
• Underwriters: The lock-up agreement provides assurance to the underwriters by limiting potential market overhang from large shareholders during the initial post-offering period.

Next Steps

• Completion of the public offering of QXO, Inc. Common Stock.
• Expiration of the 90-day lock-up period for Jacobs Private Equity II, LLC and Bradley S. Jacobs following the final prospectus date.

Key Dates

Recommendation

Keywords

QXO Inc., Schedule 13D, Lock-Up Agreement, Public Offering, Common Stock, Preferred Stock, Warrants, Beneficial Ownership, Bradley S. Jacobs, Jacobs Private Equity II, SEC Filing, Capital Raise, Underwriting