Shares of robotics specialist
have fallen more than 20% in the past month, but insiders haven't experienced the downturn's full impact: The company's management has been steadily offloading its stake in the company.
In the last month, iRobot's management, including CEO Colin Angle, Chairman Helen Griner, and President White Gregory Francis, among others, have sold 175,546 shares, according to InsiderScore, a Web site that tracks insider selling.
Over the past three months, they have sold 488,779 shares, with small sales almost every day this month.
The sustained insider selling, though, shouldn't come as a complete surprise to company watchers, however. During its second-quarter earnings call in July, iRobot announced that as part of a "portfolio diversification" effort, the founders and senior management entered into trading plans in August, as restrictions on the sale of stock by insiders expired at the time. The plans allow for formulaic programmed selling of shares.
"What investors can take away is that the selling is not based on current stock price, but is predetermined," says Mr. Silverman.
iRobot says it made investors aware that insiders would not sell more than 10% of their respective holdings during the next 12 months.
However, the selling seems to have had an impact on the company's stock price. Shares of iRobot were down 64 cents, or 3.1%, to $19.83 in recent trading.
"Certainly, the sales are not creating a positive atmosphere for the stock now," says Ben Silverman, director of research for InsiderScore Web site. "They could create an overhang if sales continue over a long period or acceleration in the amount."
Since August, at least $11 million worth of stock has been sold, he estimates.
"All of the shares, except for 6,500, were sold
in the past three months under trading plans," says Silverman. "So, in a sense it is the company's management trying to take advantage of the IPO."
iRobot was founded in 1990 by then-researchers at MIT's artificial intelligence lab with the idea of creating robots for use in businesses, military, and homes. The Burlington, Mass.-based company went public in November 2005 and now has more than 300 employees.