Strategy Faces Insider Selling Jitters With $15M MSTR Stock Sale But There’s A Catch
Highlights
- Strategy executives recently sold more than $15 million worth of MSTR shares.
- It led to insider trading concerns amid public backlash around its latest BTC sale initiative.
- The SEC filings cleared that the transactions were in response to tax-related audits.
This week, Bitcoin treasury firm Strategy’s top executives sold over $15 million worth of MSTR stock. It reignited worries about insider selling, after the company’s recent Bitcoin sale. However, the SEC disclosures reveal a different picture.
Strategy Execs Spark Insider Selling Allegations
The recent SEC filings show that Strategy President and CEO Phong Le vested 190,740 PSUs. The award value was roughly $22.97 million based on the price of $120.44 on Strategy’s last day of trading on June 5.
In order to comply with tax withholding requirements for the vesting, 93,738 shares were sold. It resulted in total proceeds of approximately $11.13 million. Contrary to public belief, the MSTR stock sale wasn’t a part of an insider selling campaign.
It is noted in the filing that the sale was only to pay withholding taxes. It stated, “Such sale was made solely to pay Strategy the tax withholding obligation.”
The filing also revealed: “The sales were effected pursuant to a Rule 10b5-1 instruction letter entered into on May 7, 2024 to satisfy the reporting person’s tax withholding obligation due upon the vesting of previously granted equity awards.”
Further, Executive Vice President and CFO Andrew Kang, a separate Form 4 filing reveals, received 68,120 PSUs. The stash had a face value of about $8.2 million. In order to pay taxes that would be due, around 33,060 shares were sold in several transactions. According to the values disclosed, the sales were worth around $3.97 million.
Combined, the two executives sold approximately $15.1 million worth of stock. Meanwhile, they received vested equity awards valued at more than $31 million.
Backlash Around Selling BTC
The disclosures come at a sensitive time for Strategy. The market has been on shaky ground since the company revealed the sale of 32 BTC in late May. Though it was a relatively small sell-off but enough to trigger speculation about future sales. With 843,706 BTC in the Strategy’s Bitcoin treasury, some investors saw it as another bearish indicator.
It even led to a spat between Jim Cramer and Michael Saylor. Cramer attributed the recent market crash to Saylor selling BTC and criticized him of ‘murdering’ Bitcoin.
On the contrary, the SEC filings told another story. These were both automatic tax withholding sales and were done in accordance with pre-arranged Rule 10b5-1 plans around 2 years ago.
This means that the transactions were not at the discretion of the insider. Hence, they were not insider sales. In particular, the both executives’ total stock holdings rose following the vesting event, with the majority of shares being retained by them.
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