Wednesday, April 24, 2024

Why Jamie Dimon’s $150 million JPMorgan stock sale could be reason for caution

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JPMorgan Chase & Co. CEO Jamie Dimon dumped $150 million in the company’s stock Thursday in his first-ever sale, a recent filing shows. He had previously indicated an intent to unload stock.

Dimon sold 821,800 JPMorgan shares
JPM,
+0.50%

at average prices near $182.73, according to a filing with the Securities and Exchange Commission. The sales were made through a Rule 10b5-1 trading plan, which allows company insiders like executives and board members to arrange for stock to be sold under predetermined conditions.

Shares of JPMorgan “have been hitting all-time highs in recent days so it’s unclear if these are triggers” or if the plan was arranged for sales based on timing, wrote Ben Silverman, the vice president of research at VerityData, which tracks insider activity.

He noted in his report that a “review of the stock’s daily chart brings up some questions as to whether trigger prices were employed.” Dimon’s selling took place on the first day ever that JPMorgan shares traded at and upwards of $182, he highlighted.

JPMorgan’s stock had risen about 30% since Dimon adopted his trading plan, “which would be a fairly ambitious trigger for a plan with a relatively short duration,” Silverman said. The plan expires Aug. 23, and Dimon could sell up to 178,000 more shares under it.

Dimon last year disclosed the plan to sell up to a million shares for “financial diversification and tax planning purposes.” JPMorgan declined to comment Friday on Dimon’s selling beyond what was in that October filing.

Silverman said he had expected Dimon to start selling near this time as the “cooling-off” period for his trading plan recently lapsed, though he was anticipating that Dimon would dump shares more “methodically” rather than through a giant sale at the start.

Other JPMorgan insiders sold stock as well Thursday. Chief Information Officer Lori Beer dumped $716,000 in stock, and General Counsel Stacey Friedman sold $1.1 million. Troy Rohrbaugh, who serves as co-CEO of JPMorgan’s commercial and investment bank, unloaded $13.7 million in stock.

Those sales also came through trading plans.

“These are sales of a small fraction of their holdings and in accordance with 10b5-1 selling programs,” a JPMorgan spokesperson said.

Prior to Thursday’s selling, Dimon was a buyer of JPMorgan’s stock, last scooping up stock on the open market in February 2016, according to Silverman.

“Dimon’s surprising selling behavior — and the fact that he has a strong buying track record — alongside the cluster of sales represents a cautious data point,” he wrote.



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