Nvidia insiders unload shares after 220% AI rally
WHILE corporate insiders are increasingly betting on shares of their own firms, bosses at the S&P 500’s best-performing company are cashing in.
Nvidia executives and directors last month sold or filed paperwork showing they intend to sell roughly 370,000 shares worth about US$180 million, according to data compiled by the Washington Service. If all of the shares were sold, it would be the biggest monthly disposal by US dollar value in at least six years.
After more than tripling in 2023, Nvidia shares have turned sluggish. The stock has fallen more than 6 per cent since Nov 21, when the company gave a forecast for revenue in the current quarter that exceeded the average analyst estimate by about US$2 billion, fuelled by heavy demand for artificial intelligence computing chips.
It’s understandable that insiders would want to lock in gains after such a stellar run, of course. However, selling hardly inspires confidence in a future rally. Nvidia insiders haven’t made any stock purchases since 2020, according to the Washington Service data.
“It is somewhat interesting that there has been a lot of sell activity and no buying,” said Shana Sissel, chief executive of Banrion Capital Management, which holds Nvidia shares. “Given how the stock price has done, the opportunity to monetise some of their compensation makes sense.”
A representative for Nvidia said the majority of the sales are based on 10b5-1 plans, in which the price, amount and dates of the sales are set in advance.
Among the four insiders who disclosed sales or intent to sell in November was Mark Stevens, a director at Nvidia since 2008. The former managing partner at venture capital firm Sequoia Capital filed a form 144 on Nov 24 indicating the planned sale of 300,000 shares and sold 10,280 shares on Nov 24 and Nov 27. Stevens has sold hundreds of thousands of shares over the past few years and still has a stake in Nvidia worth about US$2 billion, according to data compiled by Bloomberg. Other sellers include Debora Shoquist, executive vice-president of operations, and Dawn Hudson, who joined Nvidia’s board in July.
In the S&P 500, corporate insiders stepped up buying of their own shares in November with the ratio of buyers to sellers poised to hit a six-month high, according to data from the Washington Service. BLOOMBERG
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