May 2018 - 5,000,000 shares sold @ $6.94June 2019 - 4,100,000...

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drbrooks

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03/08/20

11:52

Post #: 46261675
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Originally posted by Andredamus1: ↑

There has been a lot written about how the sale of founding directors shares should be viewed by the market. A favourite expression by those who believe that it should be viewed negatively is that "directors are dumping stock on unwitting bag holders". I thought it was worthwhile testing this thesis in relation to the shares sold by Afterpay's founders since their first sale in 2018. A history of share sales undertaken by the founders is as follows (noting that the 2 founders have to date always sold completely in unison - amount and price):

May 2018 - 5,000,000 shares sold @ $6.94
June 2019 - 4,100,000 shares sold @ $23.00
July 2020 - 4,090,000 shares sold @ $66.00

So after starting out with 25m shares each, the founders are now holding 18.4m shares each (valued at $2.5b based on Friday's closing price). Moreover, based on the current share price, the founders have transferred $407m in value from themselves to the "unwitting bag holders". Seems like a pretty good deal for the bag holders from where I'm sitting.

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May 2018 - 5,000,000 shares sold @ $6.94
June 2019 - 4,100,000 shares sold @ $23.00
July 2020 - 4,090,000 shares sold @ $66.00

The first transaction tells me that the founders (insiders) never believed the Co was worth much more than what they sold for.
The second was an omg let's cash in while we can move.
The third was accompanied by a statement that they wouldn't sell any more until after the AGM (I think it was the AGM).

All downhill from here I think and the AFR's negativity will ultimately be proven to be correct.
The $66ers will be wondering if it was such a great idea.
Short!

But anyone who has held for any period of time has built up a decent buffer so they can afford to wait a bit and see.

APT Price at posting: $65.88 Sentiment: Sell Disclosure: Not Held
7 Upvote

2 Great analysis

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