The Marley Spoon AG (ASX: MMM) share price is under pressure on Monday and is trading notably lower.
In morning trade, the meal kit delivery company's shares are down 8% to $1.86.
This means the Marley Spoon share price is now down 31% from $2.71 since the start of the year.
Why is the Marley Spoon share price sinking?
The catalyst for the weakness in the Marley Spoon share price today was news that Woolworths Group Ltd (ASX: WOW) has sold its stake in the company.
According to the release, the retail conglomerate has ceased to be a substantial holder following the completion of a sale of 28,026,000 Chess Depository Interests (CDIs) or 28,026 ordinary shares in Marley Spoon via an underwritten block trade. This represents a 9.87% stake in the company.
Woolworths has agreed to sell its interest for $1.91 per CDI, which equates to a discount of 5.9% to where Marley Spoon shares were trading at Monday's close.
This values Woolies' offloaded stake at approximately $53.5 million.
What now?
One positive for the Marley Spoon share price is that Woolworths may no longer be a shareholder, but it doesn't plan to leave the company high and dry.
The release notes that in June 2019, Woolworths and Marley Spoon entered into a five year strategic growth alliance. This alliance covers things such as marketing support and customer origination programs, as well as cooperation on logistics and supply chain operations.
Positively, Woolworths continues to remain committed to the ongoing growth alliance at least until the end of the agreement in 2024.
The retail giant has not yet commented on the reason for the sale of its Marley Spoon stake. Nor has it revealed what it plans to do with the proceeds.
