If you’re an officer or director of a public company, this is your worst nightmare: You’re sipping coffee at work one morning when a FedEx package is dropped on your desk. Inside you find a letter from the SEC notifying you of a court date to answer charges of trading on inside information. A scenario to be avoided for sure. However, here’s the problem:  The U.S. has no insider trading laws. What? I can hear you saying, then how is it that white collar criminals do time for profiting from secret information? Good question.
On June 13, 2018, Elon Musk reported buying 72,500 shares of Tesla, Inc. (TSLA) at an average price of about $344, spending nearly $25 million. Tesla stock rallied about 7.5% over the next three days. But the big purchase by Musk begs the question: Is it usually profitable to follow famous CEOs into their own stocks when they buy shares?
When screening insider trades, my interest is always piqued when I see both top executives of a company buying shares. It implies that the two people with the best information on that company agree the shares are a good value. That’s what just happened at FS KKR Capital Corp (FSK). Both the Chief Investment Officer (CIO) and the CEO, along with a director, purchased a total of $495,000 of their company’s stock.
Many traders know of Bruce Kovner, the cab driver turned multi-billionaire, from his interview with Jack Schwager in the classic investment book Market Wizards. As founder and Chairman of Caxton Associates from 1983 to 2011, Kovner reportedly averaged 21% annual returns. Kovner managed as much as $14 billion...
Jeff Bezos sold $3B of Amazon stock on Nov. 2 - Nov. 3. The world's richest person unloaded 1 million shares of his company at an average price of $3022.84. Amazon(AMZN) closed today at $3143.74, down 4.57%. The sales reduced the founder's stake in the giant online...
Last week, Abdiel Capital added to its its Appian and Fastly stakes -- core positions for the top-performing fund. Managing partners Colin Moran and Geoffrey Gentile of New York-based Abdiel Capital Advisors aren't big on diversification. The managers prefer to focus on a...
Insiders buy market crashes, backing up the truck if their shares get cheap enough. The smartest fund managers can make their year -- even careers -- acquiring great companies at phenomenal bargains during market crashes. True market crashes are rare--black swans. But garden variety "panics" occur fairly...
On Sunday, January 18, 2009, as the financial crisis intensified, the Las Vegas Sun ran an article entitled: “Las Vegas Sands: A big rise, a big fall.” The piece chronicled how Las Vegas Sands casino founder and CEO Sheldon Adelson’s personal fortune peaked in 2007 at $28 billion on the strength of his stake in Las Vegas Sands (NYSE:LVS) stock, making him the third richest man in America.
Continuing the series on the greatest insider trades: On October 15, 2018, Citigroup (NYSE:C) reported Q3 2018 EPS of $1.73 on revenues of $18.39B, generally in line with expectations. Trading near $70, Citi has a market cap of $175 billion, and is one of the premiere U.S. financial institutions.
In June of 2008, Aubrey McClendon, the Chairman and CEO of Chesapeake Energy (NYSE:CHK) was riding high:  He was a superstar of the Oil and Gas world, a financial wizard who had started Chesapeake with a $50,000 stake in 1989, and grown the company into a behemoth with a market cap over $30 billion, the nation’s 2nd largest producer of natural gas after ExxonMobil.