Insiders at publicly listed U.S. companies are cashing in on the stock market boom following the election. According to VerityData, in the fourth quarter, the ratio of insider sellers to buyers among S&P 500 constituent companies was 23.7 to 1, the highest level since the U.S. first mandated numerical disclosure of insider trading in 2004.

So far, the highest record for this ratio was reached in the second quarter of 2021 at 23.6 to 1. In comparison, the average level since 2004 is slightly below 12 to 1. These data include trades conducted under pre-planned 10b5-1 trading plans.

VerityData research director Ben Silverman stated that there are three main reasons for the increase in stock sell-offs in the U.S. after the election.

First, executives are constrained by trading restrictions before the company's financial report is released. With the election approaching, most companies have begun to announce their third-quarter results, leading to a significant increase in stock sell-offs as the trading window opens.

Second, market performance has led major U.S. stock indices to reach historic highs, and many executives want to lock in profits before any short-term fluctuations. Moreover, many 10b5-1 trading plans are price-triggered, meaning executives set the levels at which they will sell stocks.

Finally, Silverman pointed out that the outcome of the election may also stimulate executives to sell stocks.

According to VerityData, executives at private education company Grand Canyon Education sold stock worth a total of $2.3 million in the fourth quarter. Over $1.3 million of this came from CEO Brian Mueller's sale on November 12. Grand Canyon Education's stock price rose by 14.6% on November 6 after the election, and it has increased by 13.2% so far this quarter, potentially marking its sixth consecutive quarter of growth, which would be its best streak since its IPO in 2008.

Since early November, Reid Hoffman's Greylock Partners has sold $80.6 million worth of Aurora Innovation stock. The latter produces software for self-driving cars and is viewed as a beneficiary of President Trump's policies surrounding autonomous vehicles. Since Trump's election victory, Aurora Innovation's stock price has risen by over 20%.

Since early November last year, Palantir's CEO Alexander Karp has sold $1.05 billion worth of company stock through a 10b5-1 trading plan. Silverman noted that trading plans created under this regulation must have a 90-day cooling-off period between the plan's adoption and the first trade, meaning these plans must have been established at least in August.

On November 12, Daniel D 'Aniello, honorary chairman of private equity giant Carlyle Group, sold company stock worth $25.5 million. Trading documents show that these stocks were held in trust. According to VerityData, before Carlyle's stock price fell, D'Aniello sold company stock at $48.40 per share in August and November 2021, while the company's stock price dropped to $22.70 in October 2022.

According to a 10b5-1 trading plan approved on August 12, two Tesla directors exercised stock options worth over $60 million: Kathleen Wilson-Thompson sold $34.6 million in company stock on November 11. Robyn Denholm sold $35.3 million in stock last Friday as part of a trading plan established in July to liquidate options expiring in 2025.

Insiders at Trump Media (TMTG) sold $16.3 million worth of stock in the days following the election: According to SEC filings, CFO Phillip Juhan sold $11.9 million in stock in two transactions on November 8 and November 11. Board member Eric Swider sold $3.8 million in stock on November 8.

Nucor Corporation CEO Leon Topalian sold $1.9 million in stock at an average price of $169.11 the day after the election. The company's stock rebounded after the election voting ended, rising 16% on that day to close at $167.74.

Insiders at industrial supply company Fastenal have sold approximately $22.3 million in stock so far this quarter, including $3.4 million sold by CFO Holden Lewis on November 7 and $2.7 million sold by CEO Daniel Florness on November 11.

Article forwarded from: Jinshi Data