The market may be pushing higher today, but the same cannot be said for the IDP Education Ltd (ASX: IEL) share price.
In early trade the language testing and student placement company's shares crashed as much as 10% lower to $18.08.
They have since recovered a touch but are still down 8% to $18.50 at the time of writing.
Why is the IDP Education share price crashing lower today?
Today's decline follows the release of an update by IDP Education on the Education Australia shareholding.
Education Australia is IDP Education's largest shareholder with a shareholding of 111,964,481 shares. This represents a massive 40.23% stake in the company.
On 25 June 2020, Education Australia sold 14,062,999 shares via an underwritten block trade of shares to institutional investors at $15.55 for a total of ~$219 million.
This sale was undertaken due to the impact of COVID-19 on Education Australia shareholders. It noted that its shareholders, which comprise 38 universities, were facing material financial challenges and this sale allowed them to monetise some of their investment.
It commented: "Most, if not all, of these Education Australia shareholders are motivated by the need to release funds for other purposes in their capital constrained Universities, a need compounded by the impact of CoVID."
Following the sale, Education Australia stated that "for a period of six months, it will not dispose of any further shares in IDP."
What was today's update?
Less than four months later, Education Australia has advised that it is undertaking a consultation process with its university shareholders. It explained that this process may lead to a further sell-down of its shareholding in IDP Education.
IDP Education commented: "The impact of COVID-19 has presented EA shareholders with material financial challenges, and the investment in IDP represents a potential source of capital for a number of the university shareholders."
No further details were provided, but based on the volume of shares traded today, it doesn't appear as though Education Australia has sold shares. Instead, this decline looks to have been driven by other shareholders selling out before its largest shareholder does.
