AI semiconductor company KLA Corporation has slid 40% since June 30, shedding $160 billion in market capitalization, as its executives and other insiders have disclosed over $64 million worth of sales in SEC filings.
Although the company claims that most of these sales followed regularly scheduled trading plans as part of executive compensation packages, no insiders decided to make any open market purchases during that time.
- President Richard Wallace led the selling at $17.4 million
- CFO Bren Higgins sold $13.9 million
- Executive Vice President Brian Lorig and Officer Mary Beth Wilkinson each sold more than $12 million
- President of Semiconductor Products Ahmad Khan sold $6.6 million
- Senior Vice President Virendra Kirloskar sold $1.8 million
KLA’s stock hit an all-time high of $307.37 on June 30. It closed at $183.77 yesterday.
The corresponding market cap loss was over $160 billion: $401 billion to yesterday’s $240 billion.
Each insider sale occurred on a distinct date and price, so the above transactions did not occur altogether after, but rather during the 40% stock slide.
Buyers who chased KLA during the summer frenzy of AI stocks are now experiencing deep pain. Any $10,000 investment at that June 30 high is now worth less than $6,000.
KLA insiders sell for many reasons, haven’t bought for any reason
Of the sale transactions, the vast majority carried a Rule 10b5-1 representation. Such qualifying trading plans provide a defense to any potential insider trading liability.
These trading plans must be established in advance and operated under the rule’s conditions. These filings do not prove KLA’s insiders foresaw any price decline.
Read more: Meta insiders sold 150 times and bought zero in the last six months
To be fair, the absence of buying isn’t proof that KLA is overvalued. Planned selling isn’t proof of a bearish forecast by insiders, either.
Still, pure selling with $0 of buying certainly could leave some investors uncomfortable.
The newest insider trading filing reached the SEC’s EDGAR system on August 14 and covered an August 13 sale.
Later August trades might not yet have reached EDGAR, although public companies are required to promptly disclose insider transactions.
An SEC Form 4 of a qualifying insider trade is due before the end of the second business day after the trade date.
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