Recent transactions by both Amazon’s chief executive and a board member seem linked to the stock’s price, says an expert
Amazon CEO Andy Jassy sold stock earlier this week.
Amazon.com Inc. Chief Executive Andy Jassy sold $9 million worth of his company’s stock this week, in what one expert sees as a potentially “cautious” data point for investors.
Jassy dumped 50,000 Amazon shares at a price of $180 apiece Monday, according to a filing with the Securities and Exchange Commission that was made public Wednesday. Board member Jonathan Rubenstein unloaded 5,556 shares at the same $180 price in a roughly $1 million transaction.
The sales by both company insiders took place through Rule 10b5-1(c) trading plans, which let executives and board members arrange for sales in advance based on predetermined conditions such as pricing and timing.
Amazon didn’t immediately respond to a MarketWatch request for comment on behalf of the company, Jassy or Rubenstein.
While it’s not necessarily clear what criteria are responsible for sales in a given trading plan, the fact that Jassy and Rubenstein both sold stock at $180 suggests their transactions were “price-triggered,” according to Ben Silverman, who tracks insider buying and selling at VerityData and looks for signals that may express an insider’s view of a stock’s valuation.
“The tandem price-targeting by two insiders who have effectively used price triggers previously and the expansion of sales volume represents a cautious valuation data point at the commerce and technology giant,” Silverman said in a note to clients earlier this week.
While Jassy has sold Amazon shares “often” since he began having to report such transactions in 2006, Silverman noted that he has only turned to price triggers in “limited” instances. But in those cases, the resulting sales seemed “well-timed,” he observed.
Jassy’s sale this week came through a trading plan that he adopted in mid-November, according to Silverman. Though the Amazon CEO has nearly 69,000 shares remaining to be sold under that 10b5-1(c) program, Silverman thinks any remaining sales will come through vestings of restricted stock, rather than price targeting.
Meanwhile, Rubenstein’s transaction was done through a trading plan enacted in early November, and Silverman believes that his previous sale, a Feb. 9 transaction at a $171 per share, also was triggered by price.
Before that, Rubenstein “last employed a trigger price in 2021 when a sale at $185.00 caught a price within 2% of what is still the stock’s all-time high,” he continued.
Silverman sees these latest insider moves as more insightful for investors than former CEO and current executive chairman Jeff Bezos’ recent selling spree, since Bezos ”has historically not been a price-oriented seller and when he sells he typically sells in large quantities.”
Jassy continues to own about 2 million Amazon shares indirectly, roughly 66,000 through a trust and almost 10,000 through an Amazon 401(k) plan. Rubenstein still owns nearly 110,000 Amazon shares directly.