Viasat CEO Sells 200,000 Shares for $7.0 Million. Should investors worry?
What this transaction means for investors
Insiders may sell shares for various reasons. It could be a portfolio management move, or fund raising for college tuition or a new home. To avoid the perception that investors might think an insider is trying to time a trade, Rule 10b5-1 was established in 2000. This transaction was performed under that rule.
Viasat's chairman and CEO Mark Dankberg adopted the plan for this sale on Sept. 15. It's likely he wanted to lock in some profits after Viasat shares took off beginning in July. The stock has soared more than 150% from the time the company announced it was chosen to deliver next-generation encryption for U.S. government cloud data centers in late July.
Mr. Dankberg still retained nearly 90% of the holdings in his family trust after this sale. The company is developing a global satellite communications network to power high-quality, dependable, safe, cost-effective, and speedy broadband connections. Viasat could still have plenty of growth ahead, and investors shouldn't consider this transaction as any less conviction in the company by its chairman and CEO.
Glossary
Form 4: A required SEC filing disclosing insider trades of company stock by officers, directors, or significant shareholders.
Open-market sale: The sale of securities on a public exchange, rather than through private transactions or company programs.
Indirect holdings: Shares owned through trusts or other entities, not directly in the individual's name.
Trust holdings: Shares managed by a trust for the benefit of an individual or group.
Dispositive event: A transaction where ownership of securities is transferred or sold, as opposed to administrative changes.
Rule 10b5-1 plan: A prearranged trading plan allowing insiders to sell stock on a set schedule, reducing accusations of insider trading.
Weighted average sale price: The average price per share received in a transaction, weighted by the number of shares sold at each price.
Total return: The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.
TTM: The 12-month period ending with the most recent quarterly report.
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Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Viasat CEO Sells 200,000 Shares for $7.0 Million. Should investors worry? was originally published by The Motley Fool
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