T-Mobile insiders, including Mike Sievert, are dumping their company shares
Further digging shows that Datar actually sold more shares this month. On March 4, he sold 3,291 shares of T-Mobile at a price of $221.10 for gross proceeds of $727,640.10. So for the month, he sold 4,291 shares of the carrier for gross proceeds of $945,890. A sale like this could be used for the down payment on a new home, or for 394 1TB iPhone Fold units.
Over the last 90 days, nearly $151 million in T-Mobile shares have been sold by insiders
Since February, sales of T-Mobile shares by insiders swamped buys by a tally of 11-0. Keep in mind that some of these sales could be for tax or estate planning and some shares are awarded to some insiders as part of their contract. Nonetheless, insiders have been dumping T-Mobile‘s shares even as the wireless provider’s transition to a digital carrier moves ahead. In the 90 days before Friday, T-Mobile insiders sold 694,134 shares of T-Mobile valued at approximately $150.8 million
One analysis of the situation states that the insider sales right near T-Mobile‘s 52-week high is an indication that insiders were diversifying their holdings or taking advantage of the rallying stock to sell at a high price. As a result, the T-Mobile insiders were probably not selling because they knew some material non-public information that would take the stock down and wanted to exit the stock before the public started selling.
However, there is a time when insiders can sell when they know material non-public information and that is if they dispose of their shares under automatic sell rules. That allows the insider to sell shares under a Rule 10b5-1 trading plan. This means that the seller has agreed to sell his holdings at pre-arranged times even if he comes into possession of material non-public information. At the time this plan is created the insider must not know about anything inside the company that could move the stock. Most of Mike Sievert’s sales took place inside a Rule 10b5-1 trading plan.
Do T-Mobile insiders know that the transition is going to fail?
Over the last 12 months, T-Mobile insiders made 34 buys totaling 709,089. They made 137 sells getting rid of 7,593,886. Obviously the majority of insiders were selling T-Mobile shares over the last year. During that time period, T-Mobile shares fell $38.59 or 15.08%
Add to this the large imbalance in insider sales and the future of T-Mobile might not be as rosy as once thought.
