When insider selling totals 114 times more than insider buying, the skeptics among us wonder what could be going on. According to Bloomberg News, cited at zerohedge.com, inquiring minds should want to know what’s going on. A total of just $2.54 million in buying took place in the first week of 2011, compared with more than $289 million in selling.
Among the leading sellers were insiders at Qualcomm Inc. (NASDAQ: QCOM), Hewlett-Packard Co. (NYSE: HPQ), and Amazon.com (NASDAQ: AMZN).
On January 5th, Qualcomm announced that it would buy Wi-Fi chipmaker Atheros Communications (NASDAQ: ATHR) for $3.1 billion. Qualcomm shares had been rising sharply since December 31st, when they closed at $49.49. After the deal was made public, Qualcomm’s shares rose to $52.03. Bloomberg reported that insiders sold about 28 million shares during that week. That looks to be about a third of the total number of Qualcomm shares that were traded that week.
The story is much the same at H-P. Some 10 million shares in the company were sold last week by insiders out of a total number of shares traded of about 100 million.
At Amazon.com, about 1.67 million shares were sold by insiders out of roughly 25 million traded last week.
So far in 2011, all three companies have posted share price gains ranging from more than 2% (Amazon) to just less than 8% (H-P). Qualcomm’s gain since the beginning of the year is above 5%.
As much as it would be nice to uncover a juicy conspiracy here, there doesn’t appear to be anything sinister at this point. At least not as far as making trades on inside information is concerned. It has been a huge move for the stock market and many corporate insiders like to book big profits just like the rest of us.
Qualcomm’s shares are off slightly, at $51.99, near the top of the stock’s 52-week trading range of $31.63-$53.03. H-P shares are up slightly, to $45.57, near the middle of the 52-week range of $37.32-$54.75. Amazon stock is slightly lower, at $183.85, approaching the top of the 52-week range of $105.80-$188.45.