FANG Insiders Selling Their Stocks Faster Than Any Time In History

The last few years have seen the so-called FANG stocks (Facebook, Amazon, Netfliz, & Google (Alphabet)) have dominated the markets...

Which has dragged technology stocks to dot-com peak levels relative to financials...

 

And this momentum has done what it always does - spark mom-and-pop to chase the quick buck as Tech stocks have seen record inflows as they have emerged as the "defensive growth" sector of the late market cycle...

But while 'average joe' is busily loading up on hyper-valued tech in his 401k like never before, insiders at the FANG stocks have been puking their own shares at a record pace this year...

Senior executives and directors of Facebook, Amazon, Netflix, and Google parent Alphabet have dumped $4.58 billion of stock this year, according to data compiled by Bloomberg. They’re on track to exceed $5 billion for the first six months of 2018, the highest since Facebook went public in 2012.


Jonathan Moreland, director of research at InsiderInsights.com, which analyzes such transactions.

“If they continue to sell into weakness, then that’ll be a strong indicator of insider sentiment,” Moreland said in a phone interview.

During the tech bubble two decades ago, “the real tell was in the early aughts when the stocks were down 20, 30, 40 percent and insiders were still selling.”

This massive insider-selling in the market-driving FANG stocks confirms the recent warning from the SEC Commissioner about insiders selling stocks into their company's buyback programs...

First, the percentage of insiders selling shares more than doubled immediately following their companies’ buyback announcements as many of the stocks popped.

Daily stock sales by the insiders rose from an average of $100,000 before the buyback announcements to $500,000 after them. The sellers received proceeds totaling $75 million more than had they sold before the announcement, the study concluded. At 32% of the companies, at least one insider sold in the first 10 days after the buyback announcement.

Second, the study found that in the days leading up to share repurchase announcements, the companies’ stocks underperformed the broader market by an average of 1.4%. During the 30 days after the announcement, the companies’ stocks outperformed the overall market by an average of 2.5%.

So who is the real sucker at this table? If you don't know by now... it's you!!

Because the smart money is bolting for the exits...

The Smart Money Flow Index (SMFI) is a leading-indicator in markets. That means when the SMFI drops sharply, usually the equity markets are right behind it.

And we haven’t seen the SMFI drop this much since the Great Recession of 2008 and the 2001 Recession. . .

Comments

any_mouse HominyTwin Tue, 06/12/2018 - 15:44 Permalink

Not destroyed. The digits are converted to titles to real assets. Transportable wealth has been relocated ex-CONUS. The criminally wealthy have been doing this for centuries.

The Debt will be discharged in bankruptcy, and the USA CORP will no longer exist. The territory will have a new system run from behind the curtains.

Imperial Russia --> USSR --> Russian Federation.

British Empire Colonies --> USA --> ???

Who benefited from the fall of the Tsar? Who benefited from the fall of the Soviet empire?

Who will benefit from the fall of USA?

The usual suspects.

In reply to by HominyTwin

shizzledizzle Tue, 06/12/2018 - 13:40 Permalink

Once again I would say that I question the usefulness of the SMFI... At the time of it's inception it's basis was a sound one. Currently there is so much distortion intentionally inflicted on metrics along with machine trading that I don't think it nearly as useful as it once was, if at all. 

wmbz Tue, 06/12/2018 - 13:43 Permalink

They are just doing it (dumping stock) for the chidrens!

They will be donating most all of their proceeds to charities.

In other words just doing Gods work!

Yen Cross Tue, 06/12/2018 - 13:53 Permalink

     It's the late Gen-xers & Millennials turn to get Corzined.

    That's why these boom bust cycles run about every 10 years. The kids in grade school today are the next round of fodder for the Manhattan Mobsters.

gmak Tue, 06/12/2018 - 14:01 Permalink

Don't forget company buy-backs are also helping this exit - in fact one could argue that they are a greater proportion of the insider exit than the mom and pop retail trade.

awarebulldog Tue, 06/12/2018 - 14:01 Permalink

Its amazing the executives get any work spending their work time selling their stock and options.  They are all very fortunate and very rich.  I guess the good news is that they will pay some taxes and help with revenue.  

reverendspooner Tue, 06/12/2018 - 14:02 Permalink

Every fucking online startup is waiting for the giant squid to come and take them. There's a global monopoly that's being created by free money for the elites. Fuck the joos, but I think it's too late already.

 

 

MusicIsYou Tue, 06/12/2018 - 14:03 Permalink

You should sell your stocks, because John the Baptist is going to crash the goddamn system, because John eats locusts that are not bugs. Either way you're going to run out of cheap oil and energy, oh no, haha.....checkmate. You're fcked!

Clowns on Acid Tue, 06/12/2018 - 14:05 Permalink

The Corporate Insiders are selling their PERSONAL shares, however the Corporation (they are people too...remember?) are buying back shares to elongate the Ponzi long enough so that the sheeple and lemmings have forgotten the Insiders selling activity, and are left clutching their adult diapers or in milennials case...crying, screaming, and knashing of teeth..just like when they realized that Hillary lost.