It’s earnings season and many of the top technology companies in the world are either about to deliver their quarterly numbers or already have. For Atlassian (NASDAQ:TEAM) investors, it has been a rather rough 24 hours. The company released its second-quarter report yesterday. Now, shares of TEAM stock are down 14% as investors digest the numbers.
Notably, the software licensing company did report revenue and earnings which beat expectations, driven by strong subscription revenue during the quarter. However, while the company did announce high guidance for its upcoming quarter, it appears the whisper number may have been even higher.
Finally, investors appear to also be focusing on news that Atlassian co-CEO and founder Scott Farquhar sold around $2 million worth of TEAM stock prior to the report. Multiple transactions on Jan. 31 took place around the $253 level. That’s significantly higher than the $215 level shares are trading at today.
Let’s dive into what to make of today’s move.
TEAM Stock Plunges on CEO Share Sale
Any time a company worth more than $50 billion moves around 15% in a given day, there’s some kind of catalyst that the market is broadly gravitating toward. In the case of Atlassian, the combination of insider selling activity and an earnings beat that may not have hit the mark for certain investors appears to be driving this move.
Now, it’s also worth noting that the $2 million share sale from Farquhar was part of a 10b5-1 trading plan, meaning that it was a scheduled transaction that would have taken place regardless of earnings. These plans are often put in place by companies to smooth out the effects of an insider looking to offload shares over a period of time. Thus, the timing of this one particular sale appears to be coincidental.
Still, the market seems to have wanted to see more from Atlassian, although its earnings and revenue beats were strong. The company’s quarterly earnings of 73 cents per share handily beat the analyst consensus estimate of 63 cents. Because of that, I have to shake my head at today’s move, as the decline seems to be overdone right now.
We’ll see how shares perform moving forward, but TEAM stock is one I’m seriously considering and will take a harder look at in the coming days.
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.
