Corporate insiders are taking advantage of the stock market’s post-election exuberance reaching all-time highs, selling off stocks at record levels. The ratio of unique sellers to buyers at S&P 500 companies in the fourth quarter was 23.7 to 1, according to VerityData, the highest level since digital disclosures of insider trading were first mandated in 2004. The full-season record to date is 23.6 to 1 in the second quarter of 2021. This data includes trades made according to a pre-planned 10b5-1 trading plan. Ben Silverman, research director at VerityData, said there were three main reasons for the post-election sales growth. First, senior executives are subject to trading restrictions ahead of company earnings reports. The election comes close to the start of most companies’ third-quarter earnings reports, so post-earnings sales surge as the trading window opens. Second, market performance has sent major stock indexes to record highs, with many executives looking to lock in gains ahead of recent volatility. Additionally, many 10b5-1 trading plans are price-triggered, meaning senior executives can choose the level at which to sell the stock. Finally, Silverman said, the election results could spur executives to sell stocks. According to Verity, executives at private education company Grand Canyon Education sold a total of $2.3 million worth of stock in the fourth quarter. More than $1.3 million of that came from a single sale by Chief Executive Brian Mueller on Nov. 12. The company is expected to post its sixth consecutive quarter of growth, which would be a record since its 2008 IPO. The company develops software for self-driving cars and is seen as a beneficiary of President-elect Trump’s policies on self-driving cars. Aurora shares are up more than 20% since Trump was elected. Palantir Big Sale Since early November, Palantir CEO Alexander Karp has sold $1.05 billion worth of company stock, all through a 10b5-1 trading plan. Verity’s Silverman noted that trading plans developed under the rule have a mandatory 90-day cooling-off period between plan adoption and the first transaction, so the plans must have been enacted by at least August. Daniel D’Aniello, chairman emeritus of private equity giant Carlyle Group, sold $25.5 million worth of company stock on November 12. Verity noted that D’Aniello previously sold Carlyle stock for $48.40 in August 2021 and November 2021, when the stock price fell. In October 2022, the stock price fell to $22.70. $34.6 million in company stock was sold on the 11th through August 12th. Option expiring in 2025. $11.9 million was sold in two transactions on November 8 and November 11. Director Eric Swider sold $3.8 million worth of stock on November 8th. Nucor Steel CEO Leon Topalian sold $1.9 million worth of stock the day after the election at an average price of $169.11. After the vote, the stock price rebounded, rising 16% on the day to close at $167.74. Industrial supplies company Fastenal insiders have sold about $22.3 million of stock so far this quarter, including $3.4 million of stock sold by chief financial officer Holden Lewis on Nov. 7 and CEO Daniel Florness on Nov. 11 of $2.7 million in stock.
Company insiders sold shares at record pace in Q4 | Real Time Headlines
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