Solo Brands Inc (NYSE:DTC) shares plunged in premarket trading on Thursday after the company revealed plans to simplify its corporate structure by dismantling its current umbrella partnership-C corporation framework.
The stock was down 17.9% ahead of the opening bell following the announcement. Solo Brands said it entered into a merger agreement on December 17, 2025, with Solo Stove Holdings and related entities as part of the restructuring initiative. The transaction is set to take effect on January 1, 2026.
Under the terms of the deal, all outstanding limited liability company units held by Solo Stove Holdings members will be converted into shares of Solo Brands’ Class A common stock, with each LLC unit exchanged for one Class A share. In addition, the company’s existing Class B common shares will be retired and canceled once the merger is completed.
Solo Brands noted that the merger and related transactions will not end or alter any obligations under the Tax Receivable Agreement dated October 27, 2021.
The company, which markets outdoor lifestyle products such as fire pits and grills, said the reorganization is intended to streamline its operating structure. Following completion of the merger, Solo Stove Holdings will remain a wholly owned subsidiary of Solo Brands.
The sharp premarket selloff suggests investors are approaching the announced structural changes with caution, despite management’s emphasis on simplification.