NEW YORK (
) -- The quiet market days ahead of holidays are always a good time to keep an eye out for the type of news that companies prefer not to highlight. Insider sales is always among the headlines that companies would rather avoid, and on Thursday, the chief technology officer of U.S. lithium ion battery player
revealed a big stock sale.
Naoki Ota, the chief technology officer at Ener1, sold $127,000 worth of Ener1 shares, or roughly 70% of the CTO's holdings in the company.
Ener1 shares finished Thursday down close to 3%, the largest loss in its peer group, though trading was late headed into the holidays.
With insider sales, it's always about the share price at which a company executive is willing to pat with shares. It's a tenuous argument at best, and executives sell for all kinds of reasons, from tax planning to investment portfolio "prudent" diversification.
In any event, investors often look for signs that company executives don't see their stocks rising much higher in the short-term based on insider sales activity.
The Ener 1 CTO sold at a share price of $4.24 on Dec. 16, as reported in an SEC filing dated Dec. 22.
The sale was completed the day after Ener1 reached a price of $4.60, which has served as an Ener1 share high mark for the past six months. Several times, shares of the lithium ion battery maker have hit the $4.60 mark, but not since April 1 have Ener1 shares been above that mark.
Ener1 surpassed $7 in January 2010, and shares have declined 35% this year.
Insider sales watchdog
ranks the Ener1 selling as "negative."
As the year draws to a close, insider selling at Ener1 has far surpassed insider buying.
data indicates that Ener1 insiders have sold roughly $627,000 worth of shares of the lithium ion battery company this year, versus insider buys of $123,000.
The year-to-date chart for the U.S. lithium ion battery plays has been an ugly one. The broad markets may be resurgent, but Ener1 and competitor
have followed a similar trajectory: straight down.
A123 Systems shares are down even more in 2010, with a decline of 57% through Dec. 23.
The outlook for the lithium ion battery plays remains uncertain headed into 2011, with the companies far from the level of production scale where manufacturing efficiencies translate into profitability. Even with the electric car market finally getting a ton of press in 2010 with the introduction of the Chevy Volt and Nissan Leaf, Ener1 and A123 Systems are not featured in any commercial production model, and the sales goals for the Leaf and Volt are modest in the initial production ramp.
-- Written by Eric Rosenbaum from New York.
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