Insiders at tech heavyweights led by Facebook Inc’s Mark Zuckerberg are selling stock at the fastest pace in six years, cashing in on buoyant equity markets.
Senior executives and directors of Facebook, Amazon.com Inc, Netflix Inc and Google parent Alphabet Inc have disposed of $4.58 billion of stock this year, according to data compiled by Bloomberg. They’re on track to exceed $5 billion for the first six months of 2018, the highest since Facebook went public in 2012 and pushed first-half insider sales to $14.3 billion.
Zuckerberg alone unloaded $2.84 billion of stock this year as part of his effort to fund philanthropic initiatives. Shares of all four companies have outperformed this year and closed on Monday near record highs. Netflix, for example, is up 88 per cent, outpacing the 4.1 per cent advance for the S&P 500.
Investors should monitor whether the sales continue during the next market pullback, said Jonathan Moreland, director of research at InsiderInsights.com, which analyses such transactions.
“If they continue to sell into that weakness, then that’ll be a strong indicator of insider sentiment,” Moreland said in a phone interview. During the tech bubble two decades ago, “the real tell was in the early aughts when the stocks were down 20, 30, 40 per cent and insiders were still selling.”