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No Fear No Favour

OYO is about to destruct: Read how

ritesh agarwal
OYO is about to destruct

Bad times always lead to a great time, but in the case of Ritesh Agarwal, these lines are erroneous.

Ritesh Agarwal, the founder of Oyo Hotels, is in the mindset of buying back shares from early Investors sequoia capital which holds 10.24% stake, Lightspeed Venture Partners with 13.4% stake in OYO to bulk up his ownership.

What does buying back or repurchasing your own shares from market means? A company can’t act as its own shareholder, so repurchased shares are absorbed by the company, to reduce the number of outstanding shares available in the open market.

This time OYO is on destruction with continuous losses, many hotels are breaking tie up a partnership with OYO, at the same time Ritesh Agarwal is looking to increase his shares of the hospitality startup to 32-33% from 10% and is going to pledge his shares in the process of raising debt. A person with 51% shareholding owns possession and Ritesh sold all his shares to investors and left with nothing.

Is Ritesh Agarwal is mutilating OYO by the repurchase of company shares?

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