Corporate insiders are selling shares at a record pace in the fourth quarter
Corporate insiders are taking advantage of the stock market’s postelection boom to all-time highs, unloading shares at record levels. The ratio of unique sellers-to-buyers among S & P 500 companies is 23.7-to-1 in the fourth quarter — the highest level since digital disclosures of insider trades were first mandated back in 2004, according to data from VerityData. The full-quarter record so far is 23.6-to-1 reached in the second quarter of 2021. The average since 2004 is just under 12-to-1. The data includes trades made under preplanned 10b5-1 trading plans. There are three main reasons for the increase in sales postelection, according to Ben Silverman, director of research at VerityData. First, executives are bound by trading restrictions ahead of company earnings reports. The election came near the beginning of the bulk of companies reporting their third quarter earnings, so postearnings sales have jumped as trading windows have opened. Second, market performance has major indexes hitting record levels, and many executives want to lock in gains ahead of any near-term volatility. Plus, many 10b5-1 trading plans are price-triggered meaning that executives select levels at which to sell shares. Lastly, the election results could be spurring executives to sell, Silverman said. Executives at private education firm Grand Canyon Education have sold an aggregate $2.3 million worth of shares in the fourth quarter, per Verity. More than $1.3 million of the total comes from a single sale by CEO Brian Mueller on Nov. 12. Grand Canyon Education gained 14.6% on Nov. 6 following the election and is up 13.2% quarter to date. It’s on pace for its sixth straight quarterly gain, which would be a record going back to its IPO in 2008. Reid Hoffman’s Greylock Partners sold a total of $80.6 million worth Aurora Innovation since the beginning of November. The firm makes software for self-driving cars and is seen as a beneficiary of President-elect Donald Trump’s policies surrounding self-driving vehicles. Aurora shares are up more than 20% since Tump was elected. Big Palantir sale Palantir CEO Alexander Karp has sold a whopping $1.05 billion in company shares since the beginning of November, all via 10b5-1 trading plans. Silverman of Verity pointed out that trading plans made under the rule have mandatory 90-day cooling-off periods between plan adoption and their first transactions, so these plans would have to have been enacted at least back in August. Daniel D’Aniello, chairman emeritus at private equity giant Carlyle Group , sold $25.5 million in company shares on Nov. 12. The transaction filing indicates the shares were held in trust. Verity pointed out that D’Aniello’s prior sale of Carlyle stock at $48.40 in August and November 2021 came before shares dropped in value. They fell as low as $22.70 in October 2022. Two Tesla directors exercised options on an aggregate of more than $60 million worth of shares: Kathleen Wilson-Thompson sold $34.6 million in company shares on Nov. 11, pursuant to a 10b5-1 trading plan adopted Aug. 12. Robyn Denholm sold $35.3 million worth of shares on Friday, as part of a trading plan adopted in July and intended to liquidate options expiring in 2025. Insiders at Trump Media sold $16.3 million in shares in the days immediately following the election: CFO Phillip Juhan sold $11.9 million in a pair of transactions on Nov. 8 and Nov. 11, according to Securities and Exchange Commission filings. Director Eric Swider sold $3.8 million in shares on 11/8. Nucor CEO Leon Topalian sold $1.9 million in shares the day following the election at an average price of $169.11. Shares bounced following the vote, gaining 16% on the day to close at $167.74. Insiders at industrial supply firm Fastenal have sold around $22.3 million in shares so far this quarter, including a $3.4 million sale by CFO Holden Lewis on Nov. 7 and $2.7 million in shares by CEO Daniel Florness on Nov. 11. — CNBC’s Jesse Pound contributed reporting