Shares of Spark Networks Inc. dropped more than 17 percent Wednesday after the company's largest shareholder said it would sell essentially its entire stake in the West L.A. online dating firm.
Boston private equity firm Great Hill Partners, which is Spark's largest shareholder with 19.7 percent, gave notice that it intended to sell its shares Tuesday. The following day, Great Hill priced the offering of more than 4 million shares at $6 each. The news sent the stock spiraling from $6.75 on Monday to close at $5.58 Wednesday. In all, Spark networks closed off 22 percent for the week ended Nov. 20.
Great Hill has been invested in Spark, which went public in February 2006, since it acquired the stake of New York's Tiger Global Management in December 2005. In that deal, it paid Tiger $5.35 a share for 2 million shares. If the underwriters exercise their overallotment in the current offering, Great Hill would be left with just 62,500 shares.
Officials of Spark Networks, which operates a network of dating sites including JDate.com and ChristianMingle.com, decline a request for comment. Officials of Great Hill did not return a call seeking comment.
Spark last week reported widening third-quarter losses despite revenue gains. The company's net loss for the quarter was $2.6 million (-11 cents per share) compared with a loss of $1.7 million (-8 cents) for the same period last year. Revenue grew 9 percent to $17.4 million for the quarter.