One of the more impressive winners in the market this year has been Salesforce (NYSE:CRM). Shares of CRM stock are up about 50% year-to-date (YTD). However, interestingly, insiders appear to be using the stock’s recent rally as a selling opportunity.
Insiders have sold a whopping $485.4 million worth of CRM stock over the past one year but have bought precisely $0 worth. Thus, investors shouldn’t be surprised to see news continue to surface that insiders are selling heavily into what appears to be the later innings of a bull market.
CEO Mark Benioff reported yet another sale of 15,000 shares of CRM stock yesterday. His selling spree has been ongoing for months, in which roughly 15,000 shares per transaction have been sold by the Salesforce founder. However, joining the fray yesterday was Chief Engineering Officer Srinivas Tallapragada, who sold 10,000 shares for proceeds of more than $2 million.
Let’s dive into what investors may want to make of these insider sales today.
CRM Stock Remains Strong, Despite Insider Selling Activity
No matter which direction the market moves, Benioff has been on a mission to slowly reduce his stake in the company. This has led to rumors in the past around whether or not the Salesforce CEO will be stepping down any time soon. Aside from speculation, there’s little to go with on this front, other than the fact that Benioff is clearly looking to reduce his stake over time.
Now, 15,000 shares of CRM stock — worth more than $3 million at today’s prices — represents a lot of money for the average individual. But the thing is, Benioff currently owns roughly 25.7 million shares. It will take a while for his stake to be gone at this disposal rate.
Whatever his rationale for selling, the fact that other executives have followed suit and are selling their stakes may be cause for concern from some investors. Generally, executives buying stock is a much better signal to the market than everyone jumping on the sell side of the train.
However, like other tech companies, Salesforce utilizes stock options and pays out a significant portion of its compensation in this way to key employees. Still, investors may want to keep an eye on how Salesforce’s planned stock sales change (or don’t) over time.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
