Why are Insiders Selling?

[Blue Lectroid]

After two great back to back days for LCID, yesterday the shares hit a brick wall. At first I thought it was just a bit of profit taking after a 2-day, 20%+ rally. Unfortunately, Lucid announced some share sales that took place on 12/5 at $2.10 by some very important folks…

Eric Bach - 100k shares, 3.6% of holdings

Dhingra Gagan - 55k shares, 8.5% of holdings

Marc Winterhoff - 90k shares, 14.4% of holdings

Peter Rawlings - 476k shares, 2.6% of holdings. Peter also bought an additional 181k shares the next day at $0.83 through exercising options.

This IS, of course a time of year where well-to-do-folks start making trades for tax reasons, but absent any comments from Lucid about why the sales happened, when your CEO, COO, VP Internal Controls and SVP / Chief Engineer all sell on the same day? Well, it obviously made the market nervous.

Should we be? Anyone here know anything more?

BTW, I am a very long term investor and I don’t watch the stock daily, but because of the size of the moves over the past three days LCID stock came across one of my news feeds and so I did a little digging…

 

[Lucken]

Of course there may be, as you say, some very valid tax implications for these moves, but yes, it’s a bit concerning.

 

[Cosmo Cruz]

Senior people are limited to when they can sell stock / exercise options ... perhaps once a year, when nothing is happening, so as not to "signal" , among other reasons.
Plus if they own the stock outright, I bet they have losses they can claim against gains in other areas. I doubt Peter et al made the decision = likely their lawyers and financial guidance made the call. There are lots of restrictions on the senior insiders about when they can sell stock.

The long-term gains of the Index 500, with their low management fee, is the way to insure financial independence in retirement.

dollar cost average your way to financial independence

 

[AirDoll]

 

[Blue Lectroid]

View attachment 25087

Thank you!!! Quick question, who is Nick Twork?

 

[idiot900]

Thank you!!! Quick question, who is Nick Twork?

He is their head of communications: https://lucidmotors.com/company/leadership/nick-twork

And has posted (once, last I looked) here.

 

[Adnillien]

Restricted shares often vest at the same time for all employees receiving them. It is very common for a portion of the shares to be sold to cover taxes and these sales would occur on the same day. Nothing to worry about.

 

[Blue Lectroid]

He is their head of communications: https://lucidmotors.com/company/leadership/nick-twork

And has posted (once, last I looked) here.

Doh! I feel silly now. Thanks!!

 

[boydracing]

Most likely Alternative Minimum Tax (AMT) strikes again for the stock sells. carry on...

 

[Pittsburgher]

Same thing again June 5th . . .(showed up on my Fidelity acct news feed today) - assume for the same reason (tax offsets) ? ?

 

[HC_79]

This is a classic case of "nothing to see here". If anyone has worked for a company that gives you shares its common that they need to be sold at certain times depending on the type issued etc. Most times a portion of the shares are sold to cover the tax obligation that comes with them. Uncle Sam always gets his cut!

 

[borski]

This is a classic case of "nothing to see here". If anyone has worked for a company that gives you shares its common that they need to be sold at certain times depending on the type issued etc. Most times a portion of the shares are sold to cover the tax obligation that comes with them. Uncle Sam always gets his cut!

I love that you’re here so I don’t have to say stuff <3

 

[pyle112]

This is a classic case of "nothing to see here". If anyone has worked for a company that gives you shares its common that they need to be sold at certain times depending on the type issued etc. Most times a portion of the shares are sold to cover the tax obligation that comes with them. Uncle Sam always gets his cut!

Sometimes it's a boat payment

 

[Cosmo Cruz]

Insiders will sell their shares when they can just to keep their investments diversified. Top-level officers are restricted to "windows" whereupon they can buy or sell. Exercising options to pay taxes is common practice.

Imagine putting all your life savings in one stock:



Enron stock price history

 

[Pragmatic]

The executives with options or other stock compensation will owe taxes when these options are exercised or stocks are transferred.

They can either dip into their savings (liquidating other holdings) and pay the tax or sell a portion of their stock to have the cash to pay the taxes. Most sell some of their stock.