Big Insider Selling By Barnes & Noble Chairman

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It is coming close to year-end, and 24/7 Wall St. is looking out for which CEOs and groups of company insiders are selling big blocks of stocks and bringing in millions of dollars going into 2014. Barnes & Noble Inc. (NYSE: BKS) chairman Leonard Riggio sold 2 million shares of common stock for some $27.6 million, a sign which some may take as a hint that the book business is no better this year.

The move includes shares which are a gift to The Riggio Foundation, as well as personally held shares of Mr. Riggio. It also appears that this comes at a steep loss and that could mean a capital gains loss harvesting effort. The SEC filing does mention tax purposes.

What may stand out is that the stake was lowered down to 26.3% from close to 30% previously. Barnes & Noble shares are actually up on the news by 0.4% to $14.06 against a 52-week range of $12.59 to $23.71. Maybe investors want less control by Mr. Riggio here.

Thomson Reuters is projecting that sales in the holiday quarter, the most important quarter by far, will be down 5.3% to $2.11 billion this year. The company is still expected to have an operating loss of -$0.95 per share this year as well.

As a reminder, not all insider selling is a flag that bad things are brewing at a company. Many insider sales are based upon taxation issues such as harvesting tax losses against other gains. Some sales by insiders may simply be financial planning tools. Others may be just to raise cash to lock in massive capital gains.