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Meta CEO Mark Zuckerberg has sold $1.2 billion in stock in the past four months. Ludovic Marin-AFP (via Getty Images)
Prominent CEOs, founders and heirs are selling large amounts of stock in the companies that made them billionaires. For the most part, stocks are trading near all-time highs.
Jeff Bezos sold $8.5 billion worth of Amazon stock in multiple transactions this month. Meanwhile, JPMorgan Chase CEO and Chairman Jamie Dimon sold $150 million in stock last week, his first sale since taking the bank’s top job 18 years ago. obtained cash. Around the same time, Leon Black, co-founder and former CEO of Apollo Global Management, sold $172.8 million in stock, another first-ever stock sale.
Mark Zuckerberg has dumped about 1.4 million shares of Meta stock worth about $638 million in dozens of trades since early February, according to an analysis by insider stock sales data firm Verity. The sale comes after selling 588,200 shares in November, 688,400 shares in December, and 447,200 shares in January. He sold nearly $600 million in his three months through February, and his combined revenue for the past four months reached his $1.2 billion.
Similarly, the Walton family trust, the heirs of Walmart’s founder, sold $1.5 billion in Walmart stock this month. The family owns about 45% of Walmart, according to Bloomberg.
Many of the sales were conducted pursuant to a 10b5-1 transaction plan that management developed late last year and early this year. These trading plans are created in advance so that the stock is automatically sold by the broker on a certain date or when the stock reaches a certain price. These are set to be triggered when executives do not have material non-public information that could change stock prices, and provide executives with protection against possible insider trading by regulators. .
The sale comes as the S&P 500 index has risen 28% over the past year, hitting a new all-time high. The Nasdaq Composite Index has risen nearly 40% over the past year.
Mr. Black of Apollo Global Management was one of the founders of the group that sold outside of the planned 10b5-1 transaction. His spokesperson said the transaction was made as part of routine tax and estate planning and to further the growth of his family firm, Elysium Management. The Walton family’s sales were also outside the scope of his 10b5-1 plan. The Walton family said in a statement in 2015 that the family sells shares “from time to time” to limit the growth of its ownership in the retail giant. The Waltons established a trust that year and told Walmart they had no plans to sell their stock.
calm before the storm
Alan Johnson, a compensation consultant who works with financial services firms, said the stock sale could be driven by the fact that elections in the fall could change things significantly. So if management currently “has more money” than expected, it’s a good idea to diversify your stock holdings. Additionally, wealthy shareholders may be taking advantage of tax cuts enacted during the Trump administration in case they are repealed by a new administration or Congress after a future election, Johnson said.
“If you read the landscape and look at what’s going to happen in our politics over the next year or so, things are pretty good right now. The market is up,” said Johnson, president of Johnson Associates. Ta. “With the way our politics and everything else is going geopolitically, it’s probably not going to be as good a year from now, two years from now.”
Regarding Mr. Dimon, Mr. Johnson said the bank’s CEO is known for owning stock in the company, a strategy that has made him rich. According to Forbes, Dimon’s net worth is $2.1 billion.
“Of course, the way he became incredibly wealthy was by acquiring stocks, holding them, and letting the stock prices go up,” Johnson said. “What’s unusual about his sales is that he’s doing it quite late in his career.”
Most executives would have sold a modest amount along the way, he explained. Johnson said it doesn’t necessarily mean Dimon’s tenure at the bank could end.
“The joke I used with my clients is that when we look back in 10 years, one of the questions we’re going to be asking is, ‘Who’s going to replace Jamie Dimon at JPMorgan?’ ” he said. “We’ve been asking that question for 10 years already.”
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