SCHEDULE 13D/A: Kanen Wealth Management Group Reduces Stake in TheRealReal Below 5%

An investor group led by Kanen Wealth Management LLC has significantly reduced its beneficial ownership in TheRealReal, Inc., falling below the 5% threshold as of January 28, 2025.

Summary

• Philotimo Fund, LP, Philotimo Focused Growth & Income Fund (PHLOX), Kanen Wealth Management LLC (KWM), and David Kanen, collectively referred to as the Reporting Persons, have amended their Schedule 13D filing for TheRealReal, Inc. (TRRR).
• The Reporting Persons ceased to be beneficial owners of more than 5% of TheRealReal's common stock as of January 28, 2025.
• As of January 30, 2025, Philotimo Fund, LP beneficially owned 1,865,676 shares, representing approximately 1.7% of the class.
• As of January 30, 2025, Philotimo Focused Growth & Income Fund beneficially owned 1,538,285 shares, representing approximately 1.4% of the class.
• As of January 30, 2025, Kanen Wealth Management LLC beneficially owned 4,273,959 shares, representing approximately 3.9% of the class.
• As of January 30, 2025, David Kanen beneficially owned 4,296,153 shares, representing approximately 3.9% of the class.
• The aggregate percentage of shares owned is based on 109,691,196 shares outstanding as of October 30, 2024, as reported in TheRealReal's Form 10-Q filed on November 4, 2024.
• Significant sales of common stock occurred in January 2025, including 1,630,289 shares sold by Philotimo Fund, LP, 403,575 shares sold by Philotimo Focused Growth & Income Fund, and 500 shares sold by Kanen Wealth Management, LLC through Managed Accounts.
• The shares were historically purchased using working capital and funds for customer accounts, which may have included margin loans.

Sentiment

Score: 3

Explanation: The sentiment is negative as a significant investor group has reduced its stake below the 5% threshold, indicating a divestment of a substantial portion of their holdings in TheRealReal, Inc.

Negatives

• The Reporting Persons, a significant investor group, have reduced their stake in TheRealReal, Inc. below the 5% beneficial ownership threshold.
• The reduction in ownership involved substantial sales of common stock by Philotimo Fund, LP (1,630,289 shares), Philotimo Focused Growth & Income Fund (403,575 shares), and Kanen Wealth Management, LLC (500 shares from Managed Accounts) throughout January 2025.

Future Outlook

The document does not contain any forward-looking statements or guidance provided by TheRealReal, Inc. or the Reporting Persons regarding the company's future performance.

Industry Context

This filing is a disclosure of a change in beneficial ownership by an institutional investor group, rather than a company performance report. It does not provide specific analysis of broader industry trends or competitors for TheRealReal, Inc.

Stakeholder Impact

• Shareholders: The reduction in stake by a notable investor group may be perceived negatively by other shareholders, potentially impacting investor confidence and the company's stock price.

Key Dates

Recommendation

Keywords

TheRealReal, TRRR, Schedule 13D, beneficial ownership, institutional investor, stock sales, Philotimo Fund, Kanen Wealth Management, investor stake