SCHEDULE 13D/A: Major Shareholder Waldencast Long-Term Capital Reduces Stake in Waldencast plc by 7.99 Million Shares

Beauty Ventures LLC and Waldencast Long-Term Capital LLC have significantly reduced their beneficial ownership in Waldencast plc, disposing of 7.99 million Class A Shares and 2.66 million private placement warrants through internal member redemption requests.

Summary

• Beauty Ventures LLC and Waldencast Long-Term Capital LLC, the reporting persons, have filed an Amendment No. 1 to their Schedule 13D, disclosing a significant reduction in their beneficial ownership of Waldencast plc's Class A ordinary shares.
• The amendment details the disposition of an aggregate of 7,990,800 Class A Shares and 2,663,599 Private Placement Warrants.
• These dispositions occurred through "Disposition Requests" from members of Beauty Ventures LLC, leading to direct transfers of shares and warrants to those requesting members.
• As of the filing date, the reporting persons beneficially own 12,412,267 Class A Shares, representing 10.8% of the outstanding Class A Shares. This calculation is based on 112,084,376 Class A Shares outstanding as of November 15, 2024, plus 3,103,067 Class A Shares issuable upon exercise of warrants held by Beauty Ventures LLC.
• The initial Schedule 13D, filed on August 8, 2022, disclosed that Beauty Ventures LLC initially received 17,300,000 Class A Shares and 5,766,666 Private Placement Warrants through a Forward Purchase Transaction.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the significant reduction in beneficial ownership by a major holder, which could be interpreted as a decrease in long-term commitment, even though the reason is an internal distribution.

Positives

• The dispositions are a result of internal "Disposition Requests" from members of Beauty Ventures LLC, indicating a structured distribution rather than a market sale driven by a negative outlook on the issuer.

Negatives

• A significant reduction in beneficial ownership by a major holder could be perceived by the market as a decrease in conviction, potentially leading to negative sentiment.

Risks

• The document states that "Certain members of Beauty Ventures LLC may submit Disposition Requests from time to time that would result in additional transfers of Class A Shares or Private Placement Warrants from the Reporting Persons to such members," indicating potential for further reductions in the reporting persons' beneficial ownership.

Future Outlook

The reporting persons indicate that additional "Disposition Requests" from members of Beauty Ventures LLC may occur in the future, potentially leading to further transfers of Class A Shares or Private Placement Warrants from the reporting persons to such members.

Management Comments

• "Pursuant to the amended and restated limited liability company agreement for Beauty Ventures LLC, dated March 1, 2021, as amended (the 'LLC Agreement'), a member of Beauty Ventures LLC may request a disposition of all or a portion of the Class A Shares or Private Placement Warrants in the member's respective capital accounts (a 'Disposition Request')."
• "Such Disposition Request, at the discretion of the managing member, involves the transfer of the Class A Shares and/ or Private Placement Warrants directly to such requesting member."
• "Upon such transfer, the Reporting Persons no longer beneficially own such transferred Class A Shares or Private Placement Warrants."

Industry Context

This filing is a standard disclosure of a change in beneficial ownership by a significant shareholder, common in the public markets. It reflects an internal restructuring or distribution within the reporting entity rather than a direct market sale, which is a specific mechanism for managing investment vehicles.

Corporate Governance

Stakeholder Impact

• Shareholders: The reduction in beneficial ownership by a significant holder might lead to market speculation or a perceived decrease in institutional confidence, potentially impacting share price.
• Reporting Persons' Members: Members who submitted Disposition Requests receive direct ownership of Class A Shares and Private Placement Warrants, allowing them more direct control or liquidity over their investment.

Next Steps

• Potential future "Disposition Requests" from members of Beauty Ventures LLC, which could lead to additional transfers of Class A Shares or Private Placement Warrants from the Reporting Persons.

Key Dates

Recommendation

Keywords

Waldencast plc, Schedule 13D, beneficial ownership, share disposition, private placement warrants, Beauty Ventures LLC, Waldencast Long-Term Capital LLC, SEC filing, shareholder stake, corporate governance