Cue Mr. Bill -- Oh no!. I prefer to tee up some Nicki Minaj and pound the alarm!. Squash the mindless drivel about executives selling stock in game-changing companies. Bezos at Amazon, Sheryl Sandberg at Facebook (FB).
First, the deal on Bezos, whether it means anything or not, warrants reporting just to illustrate the sheer "mind-boggleness" of his wealth.
It's on record at the SEC: Bezos dumped 395,051 shares of AMZN on November 29, 2011, and another 395,051 shares of AMZN on November 30, 2011. Before taxes, of course, he takes in $197,545,252 on the transactions. But that's not even the most incredible part.After these sales, Bezos still owns 87,165,171 shares of AMZN, worth roughly . . . well . . . here's what my calculator spit out: 2.179129e+10. Holy crap! That's a ton of money. So, clearly, he's still committed to the company. But, really, does it matter much? Can you use what a billionaire genius does with a fraction of 87-odd million shares of his company's stock to gauge its health? Those who try are being flat-out disingenuous. Because, ultimately, if you're bearish AMZN, you do not understand Amazon, you're all hung on valuation or a mix of both. The two go hand-in-hand. So, to push this bear case, you use anything you can to support the notion of pending doom as the stock continues to rise. Check the history. Bezos sells on a regular basis. He has been for years. Throwing a dart here: On November 1 and 2, 2010, Bezos divested 932,600 shares to collect, before taxes, $152,480,100. (I rounded the numbers there). Since he made those transactions, AMZN is up about 54%. Lots of old-time investors can't seem to get past two modern realities -- piped-up valuations and headline-grabbing insider selling. You absolutely cannot sell a stock on the presence of either of those things alone or in tandem. In fact -- and I might actually spend the time to do the work to figure this out -- I would feel comfortable betting that, at least among Nasdaq stocks (particularly Nasdaq 100 names), the higher the valuation and the more prolific the insider selling, the larger the stock's return.
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