"SEC May Want To Take A Look": Facebook Insiders Dumped $4.1 Billion Weeks Ahead Of Record Crash

For all the mockery he is subjected to on a regular basis, both here and elsewhere, Dennis Gartman issued a very prescient and timely warning ahead of Facebook's earnings. As we noted yesterday in our note why Gartman thinks that this is a "This Is A Dangerous Time", the (formerly) regular CNBC guest pointed out the following troubling fact:

... note the chart this page, courtesy of RBMP Capital, of the huge and increasing sales of Facebook by its founder, Mr.  Mark Zuckerberg, over the course of the past several years and most notably over the course of the past several months. When owners sell this aggressively… no matter what the excuse they might give…only the foolhardy do not pay heed.

Today, Gartman understandably takes a victory lap, and writes the following:

Facebook closed at 4:00 p.m. at a new all-time closing higher of $217/share, but when the news came out if fell swiftly to $173/share… a loss of just over 20%! This is fascinating in light of the massive “insider selling” of Facebook shares by non-other than Mr. Zuckerberg himself in recent weeks and noted here yesterday.

As a reminder, Facebook's crash overnight has been so massive, at one point the total value lost was over $150 billion, greater than the market cap of bitcoin, making it the biggest stock collapse in history.

Bloomberg has also picked up on this insider selling deluge, and writes that "nine Facebook insiders combined to sell about $4.13 billion worth of stock since the Cambridge Analytica data-mining scandal first surfaced on March 17."

Chief Executive Officer Mark Zuckerberg accounted for 85 percent of the total, according to data from InsiderInsights.com, which analyzes such transactions. The social media giant’s stock fell as much as 24 percent in late trading Wednesday after second-quarter sales and user growth disappointed investors.

The acceleration in selling is notable because as Gartman, and we, showed yesterday, that compares with $4.31 billion in all of 2017.  And while the traditional excuse is that "the sales were part of pre-determined trading plans" the sharp acceleration in 2018 selling, and especially in recent months, should raise some eyebrows, perhaps those of the regulators, because as Gartman - who will have the last words - writes:

"The selling was of such massive size and such recent hurried nature that one had to take note of Zuckerberg’s liquidation as a clear indication of future potential problems. Those problems were made clear last evening. The SEC may want to take a look!"

Then again, with everyone's pension invested in facebook in some capacity, the last thing the SEC will dare to do is cause a market "event" by taking a close look at the one company in which as of last quarter seemingly everyone was invested...


Free This Joe Trader Thu, 07/26/2018 - 12:18 Permalink

Crony Capitalism in FULL DISPLAY and REGALIA!!!

You've won a new caaaaaaaaaaaaar! Just too bad it is an auto-pilot, fire spewing death trap, but don't worry about it!

Cog - you got that right man!!! Spot the sucker, it's US!!!

How can this not end without blood on the streets? My shoe shine boy has a tip for y'all...strap your Chinese nose guards on!

https://www.youtube.com/watch?v=R8M8R835Ck4 - low spark indeed!!

In memory of a good friend who just died - at 55 years of age. RIP Pauleeeeeee! I am melancholy, I shed a tear for my boy!

In reply to by Joe Trader

fleur de lis powow Thu, 07/26/2018 - 15:13 Permalink

The SEC will not lift a finger.

The SEC scammers know anything and everything they want when it suits them and this does not suit them. 

The SEC is staffed by Swamp dwellers.

Is there anyone out there who still believes that the SEC knew nothing about Madoff?

They knew everything they needed to pounce but didn't, although in that case things snowballed out of control and the whole thing took on a life of its own.

In reply to by powow

glenlloyd bamawatson Thu, 07/26/2018 - 12:18 Permalink

That's an absolute riot, the SEC may want to take a look? Now? Where the fuck has the SEC been all the time?

How on earth do you have such massive selling and the SEC is not aware of it?

How do you have a biz owner selling on a massive scale and the SEC is not investigating?

Problem here is that SEC was too involved in porn viewing and didn't want to look into anything.

I wonder how many whistleblowers have come and gone this year trying to get the SEC to do something?

Certainly we ought to be able to get that info with a FOIA request?

In reply to by bamawatson

MrBoompi SDShack Thu, 07/26/2018 - 13:53 Permalink

Maybe it's picking nits, but the article says the insiders sold stock after the Cambridge Analytica scandal went public.  I don't see a problem with this.  Every other investor could have sold stock too.  Martha sold some stock based on non-public inside information.  Even so, I think a simple fine like they hand out to banks and other favored interests would have sufficed.  Even the crookedest bailed out bankers never received jail time.  

In reply to by SDShack

Endgame Napoleon Ghost of PartysOver Thu, 07/26/2018 - 13:59 Permalink

Have you ever thought about these factors as—in addition to the novelty of the accessible mobile technology—the logical reason for the growth of social media: 

  1. the mass-scale number of people out of the labor market, including between 95 & 101 million working-age American citizens every month;
  2. the 78 million Americans just working gigs, with plenty of time between those gigs for posting; 
  3. the 42 million EBT-qualified womb-productive citizens & noncitizens, working part time to stay under the income limits for free groceries, free rent, monthly cash assistance, up to $6,431 in refundable child-tax-credit cash, free electricity and subsidized daycare to accommodate them in their part-time work—a group of workers, among other groups, that can get away with playing on social media when actually at work due to the crony-mom gangs that reign in office jobs.    

I have plenty of time to post on FB now, but not when I was working. I would NEVER get away with a fraction—a tiny fraction—of the absenteeism and playing at work that crony-moms gangs get away with, in between leaving work for whole mornings, whole afternoons and whole weeks, in addition to their PTO & pregnancy leave. 

The 2008 housing collapse coincided with the rise of mobile tech, and even before the collapse, increasing numbers of citizens were either underemployed or out of the workforce, giving them tons of time for internet posting.

Add on the many above-firing, womb-productive workers in their “voted-best-for-moms” jobs, the retired grandparents posting baby show-off pics like the moms and the global population, and you have a massive user base. 

In reply to by Ghost of PartysOver