Corporate Insiders Sell Billions in Top Stocks as Market Recovers

Investing

Published: August 6, 2020 7:03 am

This year has come with more than its share of ups and downs. The COVID-19 pandemic caused a recession that came out of left field, and investors of all sorts went into panic mode. Even corporate insiders who are supposed to have clean visibility and deep knowledge of their own companies and industries found themselves caught in a hard place after February’s all-time stock market highs went into a raging bear market, with many companies losing half of their stock’s value.

There could be a warning now that the S&P 500 is almost fully recovered and the tech-heavy Nasdaq is hitting higher and higher highs almost daily. Corporate insiders, including CEOs and investing groups with board positions, are selling many millions worth of stock.

Investors might not panic seeing insiders selling stock. After all, even the wealthiest corporate insiders need to access their cash sometimes, just like the rest of us. Many sales are listed as 10b5-1 plan stock sales, which are deemed to be regular and scheduled sales of stock over time. Other stock sales may be for financial planning purposes, or to buy a mega-mansion.

24/7 Wall St. has tracked a significant wave of insiders selling $1 million or more in stock in the final days of July and the start of August. Many of these are those planned sales and are within post-earnings insider trading windows, where insiders are allowed to unload stock. Some sales are also stock options being exercised and then sold. Some individual sales featured below are not $1 million on their own, but they were more than the $1 million mark collectively.

One interesting aspect of many of these major corporate sales is that they are happening after the stock market has fully recovered and as these insiders have largely stayed away from offering guidance in the COVID-19-induced recession.

Here is a list of the billions worth of insider stock sales that have been seen from the final days of July and the start of August, and the list of insider selling would have still been massive had we backed out stock sales from the richest American. The stock sales have been so numerous that this list even only covers the companies with names starting with the letters A through F.

Aaron’s Inc. (NYSE: AAN) saw CEO John Robinson sell 261,017 shares at an average of $51.74 apiece, with gross proceeds of more than $13 million on sales July 31 and August 3. Other insiders sold a combined 63,500 shares on July 31 for close to $3.2 million. This lease-to-own retailer is in the process of splitting into two companies, and its shares have a 52-week range of $13.01 to 78.65.

Adobe Inc. (NASDAQ: ADBE) is now roughly a $450 stock, so it doesn’t take too many shares to get to $1 million in insider selling. Its shares have risen nearly five-fold since 2016. CEO Shantanu Narayen sold 10,000 shares on July 29 at $438.10, for a total of about $4.38 million. Ann Lewnes, an officer, sold 5,000 shares for more than $2.2 million on August 3. Chief Financial Officer John Murphy sold 4,000 shares for about $1.74 million on July 27.

Advanced Micro Devices Inc. (NASDAQ: AMD) has seen its stock surge, and it just joined the $100 billion market cap club. The stock is up over 17 times its value from 2016 and over 100% since March. Nora Denzel, a director, sold 75,000 shares at $78.75 for more than $5.9 million on July 31.

Alexandria Real Estate Equities Inc. (NYSE: ARE) saw roughly 120,000 shares sold by eight different insiders on July 31 and August 3. This was a combined value of $21 million, versus a $22 billion market cap. Unlike other real estate investment trusts, this stock has held ground and was recently at 52-week highs, as its office buildings cater to collaborative life science, technology, and ag-tech campuses in AAA innovation cluster locations.

Amazon.com Inc. (NASDAQ: AMZN) has seen its shares scream higher in 2020. Founding Chair and CEO Jeff Bezos had yet another round of stock sales to finance his commercial space efforts (and probably some private jet fuel). Bezos sold some 154,394 common shares on August 3 and 4, for a grand total of $485 million. Bezos had another block of 454,338 shares sold for an even larger $1.42 billion on August 3, and another 293,614 shares for some $916 million on August 4. Another 97,654 shares were sold on August 4, for more than $307 million in total proceeds. While this is a massive amount for everyone else, Bezos still has a whopping 54,880,038 shares of direct ownership in Amazon. An officer, Andrew Jassy, sold 6.945 shares on August 3 for $22.1 million under a planned sale as well.