Waystar Holding Corp.'s stock plummeted 5.23% in pre-market trading on Wednesday, following the announcement of a secondary offering of 18 million shares by the company's top shareholders.

The healthcare payments software provider disclosed late Tuesday that certain investment funds of EQT AB, Canada Pension Plan Investment Board, and Bain Capital, intend to sell 18 million shares in a secondary public offering. The selling shareholders also granted the underwriters a 30-day option to purchase up to an additional 2.7 million shares.

The secondary offering will allow the major shareholders to trim their stakes in Waystar. After the share sale, EQT, CPPIB, and Bain Capital will own 23.8%, 18.2%, and 13.7% of Waystar's outstanding shares, respectively, based on the offering prospectus.

While Waystar will not receive any proceeds from the offering, the increase in the supply of shares available for trading could exert downward pressure on the stock price. The selloff by the top shareholders is likely weighing on investor sentiment, leading to the substantial pre-market decline.