About 54% of Jersey Mike's shares now back loans to its majority owner
September 28, 2026 | prices as of the September 25 close
About 54% of the shares now back a loan
On September 22, the sandwich chain Jersey Mike's Subs filed a current report, an 8-K, with the SEC. It passes on a notice from affiliates of Blackstone, its majority owner, which we call the Blackstone side below. The company says it did not independently verify the notice.
In short, the Blackstone side has signed agreements to borrow money using its Jersey Mike's shares as collateral. Together with existing agreements of the same kind, they provide for total borrowings of about $1.09 billion. By the notice's math, the shares pledged under all the agreements, old and new, came to about 54.3% of the Class A and Class B shares outstanding combined as of September 16, when the new agreements were signed.
The prospectus had said before the IPO that this could happen, though it did not name a lender, an amount or a share count. For 180 days from the date of the prospectus, existing holders promise not to sell or pledge their shares. That is the lock-up. But the prospectus said the Blackstone side's lock-up does not stop it from pledging shares, the lenders from foreclosing, or the lenders from selling the shares after a foreclosure. The new agreements were signed inside those 180 days.
If you think of a lock-up only as a promise not to sell, this 8-K looks like a surprise. The prospectus had named, before the IPO, where that promise does not reach.
What the agreements say
The agreements were signed on September 16. Morgan Stanley Senior Funding acts for the lenders as administrative agent. As with a mortgage on a house, if the borrowers default, the lenders may foreclose on the pledged shares.
The notice itself gives the 54.3% as a share of Class A stock. Besides Class A shares, there are units of its subsidiary Jersey Mike's HoldCo, LLC, held by other owners including the Blackstone side, that can be exchanged one for one for Class A shares, and each Class B share is paired with one of those units. The notice assumes that all units not held by the company are exchanged for Class A shares. That gives the same ratio as counting Class A and Class B shares together.
The prospectus had said so before the IPO
The final prospectus from the IPO is dated July 29. Its risk factors said this. The Blackstone side may pledge its shares to borrow money. If the share price falls to certain levels, it may have to put up more collateral. If it defaults, the lenders may foreclose on the shares and sell them in the open market. The same paragraph appears in the S-1 filed on July 2.
On the lock-up, it says the lock-up signed by the Sponsor "does not restrict pledges" of its shares, "the foreclosure by lenders" or "the sale of our shares by the lenders following any such foreclosure." The Sponsor is Blackstone. The 180 days run from the date of the prospectus.
The company promised not to get in the lenders' way
The company is not a party to the loans and has no obligations under them. Even so, it gave the lenders letter agreements promising not to take actions intended to materially hinder or delay them in using their remedies, such as foreclosure. That promise is subject to law and stock exchange rules.
The prospectus had also described an arrangement for the company to help with such pledges. The stockholders agreement with Blackstone requires the company to cooperate with certain future pledges of the Blackstone side's shares, including to banks as collateral for loans. The 8-K does not say whether the letter agreements were given under that agreement.
The company filed the report as an arrangement that may later lead to a change of control of the company.
The table does not show collateral
On our scoreboard, $1,000 put into each of the eleven companies in the Recent listings group at its first-day closing price comes to $10,142 as of the September 25 close. For Freenome, we count from the day its SPAC merger closed. The same amount put into the S&P 500 on each of those listing days would be $11,723.
Jersey Mike's is one of the eleven. The table shows only prices. It does not show that about 54% of the shares are pledged.
The prospectus said "may"; the 8-K added names and numbers
The prospectus said only that the shares might be pledged. It did not say with whom, for how much, or how many shares. The September 8-K filled in Morgan Stanley Senior Funding, about $1.09 billion and about 54.3%. This is one arrangement at one company, and we chose which lines to check. Neither the prospectus nor the 8-K predicts what happens to the collateral, and neither do we.
Our read of the Jersey Mike's S-1 (the first two questions are free)
Last week's filings
Filings made from September 21 to 25 by the companies we follow in our articles, answer checks and scoreboard.
Jersey Mike's
Sept. 22, 8-K: the notice about borrowing against the shares, described above.
Holtec Nuclear
Sept. 25, request for withdrawal: asked the SEC to consent to withdrawing the S-1 it filed on July 10, because it "no longer wishes to conduct a public offering of securities at this time." No shares were issued or sold under it.
Oura
Sept. 21, S-1 Amendment No. 1: the first version with a price range, $40 to $44 a share, and share counts. The company is offering 13.5 million new shares and existing holders are selling 36.5 million. Eli Lilly has indicated an interest in buying up to $100 million and Dragoneer-affiliated funds up to $300 million, though neither is binding. At $42 a share, net proceeds would be about $532.6 million, of which about $526.4 million is planned for tax withholding and related payments on stock awards that vest with the offering.
Sept. 21 and 24, offering material filed alongside the prospectus: the launch announcement, and a transcript of an interview of Oura's CEO by Robinhood's CEO.
SB Energy
Sept. 21, S-1 Amendment No. 2: the price range is still blank.
Freenome
Sept. 23, S-8: registers shares for its equity compensation plans.
Pricings and listings
None. Bamboo, SB Energy and Oura, which are waiting to list, have not filed a final prospectus.
New S-1 and F-1 filings
We read three as possible article subjects. We set aside SPACs, filings by already-listed companies and small offerings.
Iambic Therapeutics: Sept. 21, S-1. A clinical-stage company that uses AI to look for drug candidates. A candidate for an article.
City Therapeutics: Sept. 24, S-1. A clinical-stage company developing drugs that work through RNA interference. We are passing on it.
TFP Group: Sept. 25, F-1. Underwrites insurance and reinsurance on behalf of the insurers and other capacity providers that put up the capital. A candidate for an article.
Other
Listed companies we follow, including SpaceX, Cerebras and Snowflake, had filings on changes in insiders' holdings and on planned sales. We do not list them one by one.
Get S-1 Journal Weekly in your inbox.
Free. We do not send much. Reply "unsubscribe" to any issue to stop.
See the full scoreboard →Read past issues →S-1 Journal home →