Tim Cook sells 40k Apple shares worth nearly $5M

Posted:
in General Discussion
For the fourth time in less than two weeks, Apple CEO Tim Cook on Wednesday sold off a batch of company stock worth just under $5 million, continuing a series of transactions in accordance with a trading plan adopted in 2015.




The most recent trades, revealed in a U.S. Securities and Exchange Commission filing, show Cook shed a total of 40,000 shares in four separate trades -- including a small purchase -- accomplished between Jan. 30 and Feb. 1.

On Monday, the Apple chief sold 10,000 shares at $120.93, then disposed of another 10,000 shares at $121.03 on Tuesday. It was also on Tuesday that he bought 236 shares of Apple's common stock pursuant to the company's Amended Employee Stock Purchase Plan ("ESPP"). Finally, in a pair of trades today, Cook liquidated another 15,000 shares at $127.10 and 5,000 shares at $130.

The latest stock selloff comes on the heels of three recently reported transactions, each of which was made in accordance with Cook's 2015 trading plan. From Jan. 20 through Jan. 27, the Apple chief sold 90,000 shares in nine equal transactions ranging in price from $120 to $122.24.

Including today's trades, Cook over the past two weeks sold 130,000 Apple shares worth almost $16 million.

Though unrelated to the recent selloff, Cook and his executive team missed out on bonus pay last quarter as a result of Apple's comparatively poor showing in fiscal 2016. While the company managed $215.6 billion in net sales and generated operating income of $60 billion, the performance failed to meet stretch goals instituted by the Apple's compensation committee.

Cook is in a good position to net bonus stock going into 2017, however, as Apple on Tuesday announced record earnings of $78.4 billion for the lucrative holiday quarter. More importantly, the company's primary money maker, iPhone, returned to growth with a record-breaking 78.3 million sales.

Comments

  • Reply 1 of 20
    idreyidrey Posts: 640member
    I have to say, good call on that one Tim! 
  • Reply 2 of 20
    Absolutely meaningless. He made several sales (as did other insiders) at much lower price just before ER.
    The clueless tried to spin it as, 'Cook dumping stock before bad ER release'. (How'd that turn out?)
    Sales are always ongoing as shares become vested.
    See here: https://www.marketbeat.com/stocks/NASDAQ/AAPL/
    (Click "Insider Trades")
    cornchip
  • Reply 3 of 20
    chris_cachris_ca Posts: 2,543member
    APPLE IS BANKRUPT!
    HE IS SELLING BEFORE THE FALL !!
    cornchip
  • Reply 4 of 20
    SoliSoli Posts: 8,690member
    This is proof that yesterday's earnings are going to be bad¡
    SpamSandwichnubuscoolfactorcornchipyojimbo007jfc1138Rayz2016quadra 610calimacxpress
  • Reply 5 of 20
    The previous sale was innocent.
    This is not.
    And I will cite my cognitive biases as proof.
    cornchipRayz2016
  • Reply 6 of 20
    cornchipcornchip Posts: 1,252member
    The commenters on this site are the best. I'm just sad it took me so long to figure it out & join.
    caliStrangeDaysspliff monkey
  • Reply 7 of 20
    Soli said:
    This is proof that yesterday's earnings are going to be bad¡
    😂😂😂👍
    cali
  • Reply 8 of 20
    This is a casual legal question and not an accusation:  How DOES an executive avoid charges of insider trading in a situation like this?  How big does a trade have to be before questions are raised?  Presumably buying shares TODAY is fine because (in theory) we're all on the same page with yesterday's disclosures, but YESTERDAY Tim knew more about Apple than any other investor and he was trading.  Again, I don't think Tim did anything wrong (and the dollar amounts are, for him, relatively trivial), but it seems like a very, very grey area.
    cornchip
  • Reply 9 of 20
    Rayz2016Rayz2016 Posts: 4,556member
    Soli said:
    This is proof that yesterday's earnings are going to be bad¡
    Right, everyone else can stop now. It's not going to get funnier than this!

    :-D


    edited February 2017 arrrrrcalicornchip
  • Reply 10 of 20
    This is a casual legal question and not an accusation:  How DOES an executive avoid charges of insider trading in a situation like this?  How big does a trade have to be before questions are raised?  Presumably buying shares TODAY is fine because (in theory) we're all on the same page with yesterday's disclosures, but YESTERDAY Tim knew more about Apple than any other investor and he was trading.  Again, I don't think Tim did anything wrong (and the dollar amounts are, for him, relatively trivial), but it seems like a very, very grey area.
    there is a minimum amount of time they must hold them, and they must submit the sales way in advance with the SEC. he obviously put the orders in to sell LONG LONG LONG before the earnings call in order to get regulatory approval  😂
    netmagestardustag
  • Reply 11 of 20
    hmmhmm Posts: 3,405member
    This is a casual legal question and not an accusation:  How DOES an executive avoid charges of insider trading in a situation like this?  How big does a trade have to be before questions are raised?  Presumably buying shares TODAY is fine because (in theory) we're all on the same page with yesterday's disclosures, but YESTERDAY Tim knew more about Apple than any other investor and he was trading.  Again, I don't think Tim did anything wrong (and the dollar amounts are, for him, relatively trivial), but it seems like a very, very grey area.
    It's in the first line of the article. He set these trades up some time ago.
    cornchipStrangeDays
  • Reply 12 of 20
    calicali Posts: 3,495member
    Soli said:
    This is proof that yesterday's earnings are going to be bad¡
    I wanna make this into a meme but no one will know what we're talking about. Genius though.

    chris_ca said:
    APPLE IS BANKRUPT!
    HE IS SELLING BEFORE THE FALL !!
    Apple Stores around the globe are posting "GOING OUT OF BUSINESS SALE" signs written on long bed sheets!!

    arrrrr said:
    This is a casual legal question and not an accusation:  How DOES an executive avoid charges of insider trading in a situation like this?  How big does a trade have to be before questions are raised?  Presumably buying shares TODAY is fine because (in theory) we're all on the same page with yesterday's disclosures, but YESTERDAY Tim knew more about Apple than any other investor and he was trading.  Again, I don't think Tim did anything wrong (and the dollar amounts are, for him, relatively trivial), but it seems like a very, very grey area.
    there is a minimum amount of time they must hold them, and they must submit the sales way in advance with the SEC. he obviously put the orders in to sell LONG LONG LONG before the earnings call in order to get regulatory approval  ߘ⦬t;/div>

    Thanks. I was actually wondering this.
    edited February 2017
  • Reply 13 of 20
    Rayz2016Rayz2016 Posts: 4,556member
    arrrrr said:
    This is a casual legal question and not an accusation:  How DOES an executive avoid charges of insider trading in a situation like this?  How big does a trade have to be before questions are raised?  Presumably buying shares TODAY is fine because (in theory) we're all on the same page with yesterday's disclosures, but YESTERDAY Tim knew more about Apple than any other investor and he was trading.  Again, I don't think Tim did anything wrong (and the dollar amounts are, for him, relatively trivial), but it seems like a very, very grey area.
    there is a minimum amount of time they must hold them, and they must submit the sales way in advance with the SEC. he obviously put the orders in to sell LONG LONG LONG before the earnings call in order to get regulatory approval  😂
    Riiiggght, so it wasn't because he knew that Apple was going to turn in a poor set of figures for the quarter.

    Funny how many people here didn't think of this.
  • Reply 14 of 20
    What's with the purchase of 236 shares?  :/
  • Reply 15 of 20
    hentaiboy said:
    What's with the purchase of 236 shares?  :/
    Apple has an employee stock purchase plan that lets employees, not just executives, buy shares each year at a discount. When executives acquire shares through the program, that doesn't merit its own SEC filing. But often the next SEC filing for that executive will note that the total shares they hold has increased by a certain amount because they acquired shares through the program on the last day of the offer period for that year - lately, that's been January 31st.
  • Reply 16 of 20
    This is a casual legal question and not an accusation:  How DOES an executive avoid charges of insider trading in a situation like this?  How big does a trade have to be before questions are raised?  Presumably buying shares TODAY is fine because (in theory) we're all on the same page with yesterday's disclosures, but YESTERDAY Tim knew more about Apple than any other investor and he was trading.  Again, I don't think Tim did anything wrong (and the dollar amounts are, for him, relatively trivial), but it seems like a very, very grey area.
    They aren't technically required to, but most executives such as Mr. Cook have what's called a 105b-1 plan that outlines when - or under what circumstances - they will make share trades. These plans are supposed to be established at times when the executives do not have non-public material information. Once established, they aren't supposed to have discretion over when trades happen (though they can amend plans and thus change when future trades happen, that should only be done when they don't have non-public material information and it should be done far enough in advance such that they aren't then, effectively, trading on insider information).

    By having these plans - assuming they meet certain requirements - insiders have an affirmative defense against insider trading allegations. The theory is that, while an insider may have NPMI when a trade was actually made on their behalf (these trades are made by third parties), they didn't have that NPMI when they decided when the trade would be made. These plans can call for shares to be sold on a certain date, or when shares trade at a certain price, or based on other conditions having been met. The key is that the criteria be more or less self-executing, meaning that there isn't a decision left to be made by the insider (e.g. Mr. Cook) as to whether a given trade will happen or not on a particular day. The third-party making trades for them just follows the instructions (though, there is some discretion left with that third party as to, e.g., when during the course of a given day a trade occurs).

    Without these kinds of plans, executives such as Mr. Cook would be opening themselves up to insider trading allegations almost anytime they sold shares. That's why it's advisable for them to have 105b-1 plans, even though they aren't required by law to.

    arrrrr said:
    This is a casual legal question and not an accusation:  How DOES an executive avoid charges of insider trading in a situation like this?  How big does a trade have to be before questions are raised?  Presumably buying shares TODAY is fine because (in theory) we're all on the same page with yesterday's disclosures, but YESTERDAY Tim knew more about Apple than any other investor and he was trading.  Again, I don't think Tim did anything wrong (and the dollar amounts are, for him, relatively trivial), but it seems like a very, very grey area.
    there is a minimum amount of time they must hold them, and they must submit the sales way in advance with the SEC. he obviously put the orders in to sell LONG LONG LONG before the earnings call in order to get regulatory approval  ߘ⦬t;/div>
    They don't have to hold on to these kinds of shares for a minimum amount of time. They can, and often do, sell them as soon as they vest. The plans which are typically used to determine the timing of sales are set up in advance though - sometimes a couple of months, sometimes years. They also don't submit the sales to the SEC in advance. They do, however, have to report such sales to the SEC within 3 business days of making them. That's why this recent batch of sales on behalf of Mr. Cook have been reported in 4 separate filings. He's been selling 10,000 shares a day (until yesterday when he sold 20,000) and after 3 days the last 3 days worth of sales get reported.

    In this case, the plan these sales were made pursuant to was adopted in August of 2015. It wouldn't have had to have been that long ago though. For instance, under that same August 2015 plan he sold shares in October and November of 2015 when AAPL traded above $120.


    edited February 2017 cornchipeightzerorandominternetpersonpatchythepirate
  • Reply 17 of 20
    hmm said:
    This is a casual legal question and not an accusation:  How DOES an executive avoid charges of insider trading in a situation like this?  How big does a trade have to be before questions are raised?  Presumably buying shares TODAY is fine because (in theory) we're all on the same page with yesterday's disclosures, but YESTERDAY Tim knew more about Apple than any other investor and he was trading.  Again, I don't think Tim did anything wrong (and the dollar amounts are, for him, relatively trivial), but it seems like a very, very grey area.
    It's in the first line of the article. He set these trades up some time ago.

    Good point.  So then WTF do we get a news story every time this pre-programmed trade gets executed? 
  • Reply 18 of 20
    carnegie said:
    This is a casual legal question and not an accusation:  How DOES an executive avoid charges of insider trading in a situation like this?  How big does a trade have to be before questions are raised?  Presumably buying shares TODAY is fine because (in theory) we're all on the same page with yesterday's disclosures, but YESTERDAY Tim knew more about Apple than any other investor and he was trading.  Again, I don't think Tim did anything wrong (and the dollar amounts are, for him, relatively trivial), but it seems like a very, very grey area.
    They aren't technically required to, but most executives such as Mr. Cook have what's called a 105b-1 plan that ...


    Dude, I'd give you 50 "likes" if I could.  Very informative and well written post.  Thank you.
  • Reply 19 of 20
    carnegie said:
    This is a casual legal question and not an accusation:  How DOES an executive avoid charges of insider trading in a situation like this?  How big does a trade have to be before questions are raised?  Presumably buying shares TODAY is fine because (in theory) we're all on the same page with yesterday's disclosures, but YESTERDAY Tim knew more about Apple than any other investor and he was trading.  Again, I don't think Tim did anything wrong (and the dollar amounts are, for him, relatively trivial), but it seems like a very, very grey area.
    They aren't technically required to, but most executives such as Mr. Cook have what's called a 105b-1 plan that ...


    Dude, I'd give you 50 "likes" if I could.  Very informative and well written post.  Thank you.
    You're welcome.
  • Reply 20 of 20
    According to an SEC filing made today, Mr. Cook sold another 8,571 shares yesterday. That brings the total sold by Mr. Cook over the past 2-1/2 weeks to 138,571. That's a little more than the 130,593 he sold the last time AAPL shares traded above $120 in October and November of 2015.

    Based on the timing of this filing, I would guess this represents the end of this round of selling by Mr. Cook.

    Also, there were filings made today for a number of Apple board members as well as Bruce Sewell (an Apple Senior Vice President and General Counsel) showing many of them selling shares on Thursday. Some of those shares had just vested on Wednesday or Thursday (some were options priced around $13 or $26 and some were RSUs).
    edited February 2017
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