Worthy of its own thread but taking the lead from the share price jump topic.
I am not familiar with these types of regulation so maybe someone more experienced can explain to everyone how is it possible for the ultimate insider (the CEO of Teradata) to sell tranches of stock in a black out period ? It seems a little dubious to say the least.
Are there special rules that relate to these transactions that don’t apply to others ? Does the CEO follow different governance procedures ?
I assume the black out period exists because of the earnings release that is due in early February. Even if there is a loophole that allows this type of trade, I would imagine that some of the shrewder analysts, the Teradata board and the institutional investors might be asking the CEO why those shares were sold when they were and what the implications might be.
If I was an employee, I would also be asking some challenging questions about the timing. As another poster points out, the trade appears to have taken place whilst an important employee event was taking place, which must make it quite hard to swallow for some. Hardly motivational at what is yet another tough part of the year for many.
Selling your stock is fair enough if you are taking advantage of a genuine share price rise when trading is open because the timing is less sensitive but it is clearly not acceptable when you look at the timing of this activity - not at several different levels.
Revenues are down, margins are being squeezed, cash seems in short supply and the competition appears to be tougher than ever. Hardly the time to claim success as a ‘leader’ of a company and opportunistically cash in on what looks like a market blip.
Given the history of previous executive behavior relating to compensation, large unwarranted share allocations and million dollar severance packages, you’d probably also want to know what has really changed since the last money grabbing CEO (with inside connections and beneficiaries) finally left.