Numerous times we have heard of the instrument known as a “Form 144”, but the majority of individuals don’t fully understand its utility. A Form 144 is a notice of the proposed sale of securities and is formerly issued by the SEC.
To sell such stocks, Form 144 must be filed with the SEC, but it has its own certain regulations to be followed. When there’s an order to sell a company’s stock during a three-month period, in which the sale exceeds 5,000 units or the aggregate sale price surpasses the $50,000 mark, only then does Form 144 come into action.
Despite the fact that 2022 was quite turbulent with regard to capital markets, the year ended with some very intriguing Form 144 filings in its last quarter. Although numerous insiders were seen making plans to sell the stakes, a few notable among them are named as under:
- Formed in 2015 to hold the family shares, the Walton Family Holdings Trust tops the list with filings of almost 21 million shares of Walmart Inc (WMT:US), worth nearly $3.25 billion.
- CEO and Co-founder of Veeva (VEEV:US), Peter P. Gassner made plans to sell around $724 million worth of Veeva shares, comprising nearly 4.3 million units.
- With a mission to enable visionary organizations and empower young minds, Mastercard Foundation was among the top insiders executing Form 144s of nearly 2.1 million shares of Mastercard Inc (MA:US) with a valuation of almost $716 million.
- The special purpose acquisition company SVF INVESTMENTS (UK) LTD revealed intentions to sell almost $35 million shares of its direct ownership Coupang Inc (CPNG:US), making up almost $626 million in worth.
- A publicly listed entity engaged in financial services, Itaúsa-Investimentos Itaú SA planned to sell its stakes in XP Inc (XP:US), consisting of nearly 30 million shares, valued at nearly $581 million.
- His Majesty’s department accountable for developing and executing government public and economic policy is known as HM Treasury. The treasury filed Form 144s of almost 96 million shares of Natwest Group PLC (NWG:US), accumulating a value of nearly $499 million.
- Chairman and CEO of Crowdstrike Holdings Inc (CRWD:US) - George Kurtz - planned to sell nearly 3.2 million CRWD shares at a net sale value of around $452 million.
Top CEOs Who Filed
As a CEO is an individual who is responsible for improving a company's financial strength, any trade made by him/her is often considered a signal by potential investors for future endeavors.
A few CEOs who were the most dominant in their sale trades are as follows:
- An IT professional having hefty experience and extensive knowledge of enterprise software, Peter P. Gassner of Veeva Systems Inc stands at the top by filing Form 144s of almost 4.3 million shares at a total value of up to $724 million.
- Having an in-depth understanding of corporate sales, vast exposure to organizational operations, and currently performing the role of CEO at biotech giant Moderna Inc (MRNA:US), Stephane J. Bancel planned to sell up to $370 million worth of shares, comprising almost 2.3 million units.
- The youngest person ever to be awarded the ‘Australian Entrepreneur of the Year’ in 2006 by Ernst & Young, Mike Cannon-Brookes, Co-founder of Atlassian Corp (TEAM:US), aimed to lay off his stakes in Atlassian by filing for nearly 1 million shares worth up to $194 million.
- Winner of the award 'Australian Business Person of the Year' in 2016, another Co-founder of Atlassian Corp, Scott Farquhar, planned to sell his holdings in Atlassian, worth up to $194 million. Similar to Mike Cannon-Brookes, his filings were for nearly 1 million shares.
- Having broad experience in the financial world, Michael J. Arougheti disclosed intentions to sell his stakes in Ares Management Corp (ARES:US), comprising almost 473,121 shares. His total layoff worth was nearly $40 million.
Filing a form 144 of course requires the assistance of a broker, as do most stock market filings. The names of the most active brokers in the fourth quarter of 2022 are listed as follows. According to 2iQ data, the percentage of the following brokers involved in Form 144 filings are listed as well:
- Goldman Sachs & Co LLC - 31.43%
- Morgan Stanley Smith Barney LLC - 19.64%
- Fidelity Brokerage Services LLC - 14.66%
- JP Morgan Securities LLC - 10.80%
- E-Trade Financial Corporation - 10.03%
- UBS Financial Services INC - 7.13%
- Morgan Stanley & Co LLC - 6.31%
There are many legitimate reasons for insiders to buy or sell, but it could also mean that they know something negative about the company's future and as a result want to take off or load up before any potential setbacks. But it’s also worth remembering that this is not always true. Insiders sell their stock as any other investor does, either to diversify their portfolio or secure capital gains.
So, it's always better to keep a keen eye on insider trading, especially when Form 144s are involved.