BLOOMBERG – Stock sales are reaping a windfall for the world’s richest shareholders.<\/p>\n
Corporate insiders including Amazon boss Jeff Bezos and Google co-founder Sergey Brin have ramped up stock sales recently, cashing in on a 14-month-long bull market that has helped boost fortunes by the trillions.<\/p>\n
US public company insiders offloaded shares worth US$24.4 billion (S$32.5 billion) this year through the first week of this month, with about half sold through trading plans, according to data compiled by Bloomberg. That is almost as much as the US$30 billion total they disposed of in the second half of last year.<\/p>\n
Large shareholders sell stock frequently at planned intervals, often through pre-arranged trading programmes. Yet the prolonged rally in equities markets has made the value of these disposals, whether planned or opportunistic, strikingly high.<\/p>\n
There are multiple reasons an investor of any size might be motivated to sell. After the pandemic-defying rally, valuations are increasingly under pressure from rising inflation. Investors are wary that the post-Covid-19 recovery could prompt tightening measures from the Federal Reserve. And President Joe Biden’s proposed tax hikes – including a near doubling of the capital gains rate – have created uncertainty.<\/p>\n
Whatever the reason, the sales are flooding the market with yet more liquidity, the consequences of which will ripple through philanthropy, the art market, real estate and other niches.<\/p>\n
Mr Bezos has sold US$6.7 billion worth of Amazon shares this year. While a relative pittance for the world’s richest person, it is more than two-thirds the value of shares he sold last year. Mr Larry Ellison unloaded seven million Oracle shares this month for total proceeds of US$552.3 million. Mr Charles Schwab has sold US$192 million worth of shares of his eponymous brokerage this year.<\/p>\n
Mr Brin, who has signalled that he intends to sell as many as 250,000 Alphabet shares, has disposed of US$163 million worth of stock in recent days, his first sales in more than four years, filings show.<\/p>\n
Mr Mark Zuckerberg and his charitable foundation, the Chan Zuckerberg Initiative, meanwhile, accelerated their sales of Facebook stock. Mr Zuckerberg or his charity has divested shares at a near-daily clip since last November, for a cumulative total exceeding US$1.87 billion.<\/p>\n
The surging markets have exacerbated the concentration risk of the single-stock-dominated fortunes typical of tech billionaires, said Papamarkou Wellner Asset Management president Thorne Perkin. “From a portfolio management perspective, it makes sense to spread it around.”<\/p>\n
Also among the biggest sellers are some noteworthy beneficiaries of the pandemic economy. Zoom Video Communications founder Eric Yuan and used-car retailer Carvana’s Ernest Garcia II have together received more than US$1.75 billion from stock sales since March last year, according to the Bloomberg Billionaires Index. Cyber-security firm CrowdStrike’s chief executive George Kurtz has sold shares worth at least US$250 million over that period.<\/p>\n
Zoom’s Mr Yuan – the poster child, in many ways, for the coronavirus economy – has stepped up his sales as the firm’s share price slumped. Last year, he typically offloaded about 140,000 shares a month through a trading plan, which generated more than US$350 million over the course of the year.<\/p>\n
Since March, he has sold almost 200,000 shares a month on average, yielding him about US$185 million. He also donated more than a third of his stake in the San Jose-based company as part of “typical estate planning practices”, according to a spokesman. Some of the cash from his share sales fund donations to unspecified “humanitarian causes”.<\/p>\n
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