Revenues are up, the boss is about to give his keynote, and results are due. Time to sell shares, says Salesforce CFO Is it a vote of confidence when the CFO sells $2.5m in shares as the CEO is about to make his big pitch of the year and the quarterly results are due? That's the situation at Salesforce. This week, Mark Hawkins, president and chief financial officer of the dominant SaaS cloud CRM provider, took the opportunity [PDF] to flog $ …
Usually big transactions by an insider require a lot of "up front" notification about what is being "planned", that is, difficult to be "in response" to an event, etc...
Not saying that you can't do (evil) planning months in advance, just pointing out it's different for them.
If this was done rather adhoc, you can bet that the SEC will want to take a look...
Yeah, this is the case where I work (another SaaS company with HQ in California).
Staff who meet certain criteria around having access to the companies performance data via any of the internal systems we use to track deal/partner activity (usually a minimum of salesforce access ironically) are on a special scrutiny list, and can't buy or sell stocks within so many weeks of a quarter's results being announced. I think they also have to give advance warning of selling/buying stock via a central system.
Worse, if you're that high up your trading window is effectively perpetually closed, and the only way to trade in your own stock is to file 10b5-1 trading plans with your broker, which basically instructs them to do X in three months, Y in six, ... (I think the minimum look-ahead is three months). I'd be very surprised if this is not just a pre-scheduled trade from a 10b5-1 plan.
I'm sorry, but if you are the CEO, selling shares is not a good sign. It either means you aren't paying yourself enough, or it means that your confidence in your own company isn't worth hanging on to your shares.
Neither of those choices reflect well on the company.
I resent the Wall Street attitude of thinking that shares are just a short-term investment. Personally, I think that, if you buy shares in a company, it's supposed to mean you believe in it and want to fund its development. That means that you don't sell your shares two weeks later.
There should be a law stating that shares must be kept for five years before being able to sell them.
but don't worry - it's just my opinion.
Totally agree.
Remember when one read of fellows buying and selling currencies, switching between Pounds, Francs and a variety of Dollars and getting out with, say, $50k in a few hours ?
Never saw what they gave to humanity: betting on currency's value falling may get that currency to an allegedly truer value [ for all I care ], but I still think Soros is a scoundrel.
Finance is mostly about making sure things run efficiently. Well... it's technically optimizing for making money, but usually that lines up a bit.
Often for someone to make money, someone else has to lose money or at least make the wrong decision (especially when buying and selling currency). So it's all about modelling things accurately.
It also exposes companies and politicians to very tight levels of scrutiny, which let's face, it a lot of them need...
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