Thiel, Bezos, & Zuckerberg Dump Shares Amid Surging Insider Ratio: An Ominous Sign For Bull Market
A number of structural themes have been driving US asset markets higher, including artificial intelligence, GLP-1, cloud, and biotech, as well as the prospect of a pivot in the Federal Reserve's interest rate hiking cycle if inflation does not reignite. Some Wall Street strategists, like BofA's Savita Subramanian, have hiked their year-end S&P price targets. However, her colleague, Michael Hartnett, has been countering the bull narrative that "it's only a small bubble, plus this time is different" in various notes (read: here, here, here, and here).
Given that some Wall Street strategists are split on the question, "1995 or 1999?" - one sell-side indicator has piqued our attention and could be an ominous sign that insiders see trouble ahead in the bull market.
According to Verity LLC, which tracks insider trades, the ratio of corporate insider selling to insider buying has surged to the highest level since the first quarter of 2021.
Peter Thiel, Jeff Bezos, and Mark Zuckerberg are some of the top corporate insiders dumping shares this quarter. They have sold hundreds of millions of dollars in shares as the AI bubble and Fed pivot narratives propelled the Nasdaq to new record highs.
The surge in insider selling is an ominous sign the bull market could be nearing a resistance level, Charles Elson, a legal veteran and chair of corporate governance at the University of Delaware, told the Financial Times.
"If they think that we're at the top and so they're getting out, that's a rather stark signal to everyone else," Elson said.
Ben Silverman, Verity's vice president of research, warned:
"We do view [corporate insider share sales] as a negative data point that investors should be aware of."
Silverman noted that the selling appears to be concentrated in the technology sector specifically, "We are also seeing a number of the big [company] names in this space with insider selling that is not typical."
"Clearly there's an appetite for liquidity generation right now," he said, adding, "Some of that is some pent-up demand following relatively quiet insider selling in 2022 and 2023, and certainly one impetus is [stock] market performance."
https://www.zerohedge.com/markets/thiel-bezos-and-zuckerberg-dump-shares-amid-surging-insider-ratio-ominous-sign-bull-market