Some Blackbaud, Inc. (NASDAQ:BLKB) shareholders may be a little concerned to see that the Executive VP of Finance & Administration and CFO, recently sold a substantial US$1.8m worth of stock at a price of US$55.81 per share. That sale reduced their total holding by 19% which is hardly insignificant, but far from the worst we've seen
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Yes
Said public company would need to purchase back all outstanding shares via a tender offer.
Shareholder main reject a tender offer. However it will take majority shareholders to vote down the tender offer.
So minor shareholders really have no power in this. Institutional shareholders like clear lake, teacher fund of Toronto, black rock and other investments firms will determine if the tender is voted down.
The tender will be negotiated by the equity firm and current board and leadership to determine a mutually acceptable tender price for the board and e leadership to get on board with the move private.
The board and e level will want to maximize their share value.
Question for those a bit more informed in these types of matters<
There are 2 aspects to this:
- A private equity firm can't 'buy' BB and take it private without buying 'all' the shares of the public stock. To make it palatable to shareholders, it is generally above FMV, but what that would be would be entirely dependent on the date of the M&A proposal. (see Twitter for an example of this)
- As part of any such takeover, the merger agreement itself will tell the tale of existing options; however, it's not uncommon for them to be vested either upon completion of the sooner of the merger completion date or vesting period.
As always, YMMV
Question for those a bit more informed in these types of matters, but with our bonus RSUs is there a reason to hold them with the thought that if private equity buys out the company they'll probably pay a bit more than market price for them, or just sell them at ~$55 now when it was over 60 just a month or so ago? Would the type of stock BB grants for bonuses even be worth anything in a private equity buyout?
Gosh, just three days before the announcement of the SEC settlement! How convenient.
They do not have to sell shares when the market is down for sure...they chose too.
Why would you dump so many shares in a down market. This is not an RSU issue. The RSU already has tax sale built in. This recent sale was not a tax sale. This sale was dumping 1/5th of the stock a particular individual owned.
Maybe this particular individual will be the scapr goat for a poorly planned RIF that is already affecting Blackbaud. Maybe they see the writing on their wall.
This is not a tax bill folks it's a cash grab don't get that wrong. To think this is a RSU tax bill is poorly informed and not what an "insider sale" is.
He sold stock to get the cash at a low value for a reason. And the IRS tax is not that reason.
Reported sales of stock by insiders do not include RSUs used to cover tax in grants.
These are fully owned shares that an individual has decided to sell.
This has nothing to do with bonus in shares. When you've got your bonus they sell shares to cover the tax so you dont get a huge tax bill.
That is not how it works for c level shares. Your low level bonus grants require the shares to be sold.
The c level has a different level plan. The share sold for 1.8 million + it was shares owned shares sold. Not the tax bill shares.
Based on available data from sources like nasdaq, yahoo finance and Bloomberg. This c level person sold almost 20% of their holdings. They would need to sell about 2% to cover RSU taxes not 20%.
20% is a dump because they know something is brewing. Why else sell 20% at such a low value when you don't need to sell 20% to cover the taxes.
You don't sell 1.8 million in stock to cover taxes. Yes we had to sell shares to cover taxes on our bonuses. But 1.8 million is a dump pure and simple
The majority of these trades are their RSUs vesting and requiring the sale of shares to pay for taxes. The same thing happened when our shares vested when the bonus plan ended. You can see this in the notes on the investor relations website. A big portion of their salaries are in stock, which is why a lot of shares are sold when it vests. Not saying something isn't up, but I don't think they've collectively decided to dump shares while the markets are down.
The c level knows what's up. They know at this point that private equity is getting ready to exit vs bailout and purchase blkb.
ClearLake made their moves in Sept and Oct 2022 at prices between $44 and $51.
They own 9+ million shares. They did just enough activist investing to budge the stock up a bit.
At 9 million shares owned and now a price of $56. They are making at worst $5 per share. That's a $45 million dollar payout.
Private Equity isn't gonna save this company through buy out it's gonna sink it by dumping it's stake and pocketing $45 million in less than 6 months.
That's why your e level suite is dumping. They know it and want to maximize their own profit.
Pump and dump like champs. These c level folks are good at making money on the backs of layoffs for sure.