Why Tech and Bio-Tech Leaders Have Dumped $3.6 Billion In Stock This Month

Facebook, Netflix, BeyondMeat, CRISPR, Activision, Zoom, et al: the list of tech and bio-tech companies whose leaders, investors or board members have sold billions in equities this month reads like a list of enterprises effectively designed to do well in a pandemic.

It is common for venture investors or stock-owning executives to set trades when their holdings reach certain levels, but that usually suggests the stocks have peaked at that point in the cycle. Which may or may not be a commentary on leadership example-setting, but could be a harbinger of future trends. Apres moi le deluge ('after me, the flood,') as French King Louis XV was reputed to have said? JL

David Canellis reports in The Next Web:

Insiders at US tech companies - from fintech to cloud services - collectively unloaded at least $3.6 billion worth of company shares in May, with top executives from big players like Facebook, General Electric, Cloudflare, and Activision selling small fortunes worth of stock. Few sold more than the heads of biotech companies 10X Genomics and Seattle Genetics. It’s not unusual for execs to set trades to execute under certain conditions (but) some sales might appear to be timed incredibly well, especially considering  a number of tech companies have recently traded at record highs.

Stock markets are floundering in the wake of the coronavirus (COVID-19) pandemic, and while many are stuck assessing its long-term effects — loads of tech executives have dumped their shares for major profit.

In fact, insiders at US tech companies — from fintech to cloud services — collectively unloaded at least $3.6 billion worth of company shares in May, with top executives from big players like Facebook, General Electric, Cloudflare, and Activision all selling small fortunes worth of stock.

[Read: Bezos and Zuckerberg worth $60B more in two months, thanks to COVID-19]

To digest the loin-thumping wealth recently generated by stock sales, Hard Fork built the visualisation below using the SEC data collated by FinViz. Click on each company to discover exactly who sold how many shares.

For example, navigating to the Mastercard block will show the company‘s CEO Ajay Banga selling $23.4 million worth of company stock.

You’ll also see that the company‘s general counsel, Timothy Murphy, liquidated 52,489 shares to pocket a cool $15 million. Most of the sales included in this data begin in the week starting May 15.

You can even filter the results by company to receive more detailed information. Select the “PayPal” filter and you’ll easily find that its president and CEO Daniel Schulman just dumped shares worth $3.6 million. His colleague Jonathon Auerbach almost tripled that effort, selling stock valued at $9.5 million.

Reed Hastings, in charge of streaming mainstay Netflix, also sold more than 50,000 shares for $449.23 each to earn $23.9 million. $NFLX has since dropped to a touch over $429.

Other notable inclusions were $10 million from Raymond Lane, the director of plant-based meat substitute firm Beyond Meat, and $27.2 million from Activision director Brian Kelly. Zoom‘s chief financial officer Kelly Steckelberg returned to sell stock worth $1.9 million.

Virgin Galactic whale sold $380 million worth of company stock

Few sold more than the heads of biotech companies 10X Genomics and Seattle Genetics, whose directors respectively made $241.8 million and $280 million literally overnight with their stock.

Novak Rodger, president of DNA-hacking endeavour CRISPR, managed to generate $3.25 million all by himself, a much smaller number but still a hefty payday.

Perhaps the most curious sales relate to Richard Branson’s space tourism gambit Virgin Galactic. According to recently filed SEC documents, a Virgin-owned holding corporation named “Vieco 10” sold $379.5 million worth of $SPCE between May 15 and May 22.

Weeks earlier, Branson had practically begged world governments to bail the struggling Virgin empire out of apparently imminent collapse.

It’s common for execs to set trades in advance

On the surface, some sales might appear to be timed incredibly well, especially considering that a number of tech companies included in this piece have recently traded at record highs.

However, it should be noted that it’s not unusual for execs to set trades to execute under certain conditions without any direct input.

For example, Hard Fork previously reported that Zoom‘s Steckelberg dumped millions in company stock just before the platform’s security concerns came to light. A company spokesperson later confirmed those trades were set at least 45 days earlier.

Still, there’s no doubt that selling stocks has kept our high-flying tech execs busy this month. I just hope their money managers got a decent cut.