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Unity bosses sold stock days before development fees announcement
(www.eurogamer.net)
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this post was submitted on 14 Sep 2023
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Sounds like insider trading to me
The stock is down 5.5% today. It's down 6% from a week ago.
The stock is up 0.5% from a month ago, and up a whopping 32% from 6 months ago.
It's down 50% from five years ago.
What I'm getting at is that this announcement has very little movement on the stock price overall. Unless these bosses were clearing out their inventory thinking this news would kill the company, its possible these sales were normal transactions.
The financial impact of this decision is entirely speculative at this stage. Unity's next quarterly earnings report won't be impacted by it. The market is attempting to price in losses that haven't yet occurred. We won't know how it affects stock price for awhile
Yeah, an announcement like this is the shit wall street lives for. Short term gain but a long term harm is what they're all about. That's why they love layoffs as well. Doesn't matter that it screws with company morale, short term the company makes more profit!
The small nosedive the stock price took agrees with your assessment. It'll get an emotional reaction from some, but decisions like this are made in the interest of the shareholder, not the consumer - this is a calculated move to generate profit. They decided that the losses of people abandoning the product will be outweighed by the profits of this new revenue steam.
So it's only kind of insider trader because it's only 5%?
He may have committed some...light insider trading
Edit: inb4 people don't get the joke
It's not insider trading because this decision will make the stock price climb in the long term, and any sales would need to be significant to be worth the penalties.
Stock was $39, dropped to $36. $3 difference x 2000 shares sold is a difference of $6000, something considered a rounding error when talking about the sums of money these people have.
This sounds like someone was selling their stocks and buying their kids a house by making small sales to have minimal impacts on stock price, not insider trading.
In reality the people that know their intentions are the ones that pressed the "SELL" button
So it's only insider trading if they get it right? But not just kind of right, like, really right.
If they legit sold their stock because they believed they would lose the value of their asset in the timeframe they were planning on owning it because of their company's policy change, then yes absolutely they should be held accountable.
My argument is that this isn't insider trading, but rather the movement of money for other, legitimate, purposes. I'm not saying it looks good, but it may just be coincidental bad timing that someone wanted to, for instance, pay for a year of their daughter's tuition, or buy their son a home as a wedding present.
A clearer example of insider trading is a politician's husband buying and selling shares of companies prior to public announcements of major government policies, coincidentally the companies directly impacted by those policies which their spouse was involved in enacting.
Doesn't matter if you win or lose, insider trading (illegal kind) is when someone with access to material non-public information, trades based on that info. I believe all publicly traded companies must have policies in place, so that any employees with access to this type of info have trading restrictions. In general, if they want to sell, they need to inform an internal compliance team, and then there may be mandatory waiting periods. For example, they may only be able to sell after 30 day waiting period.
Just finished taking Econ 101, didja?
Yeah no, that's not how it works.
"Normal transaction" after a fundamental change in how all games that use your product are financially responsible by novel, unmeasurable, and unrealistic metrics. No transaction prior to this kind of announcement is "normal" imo.
Why would executives sell shares of their own company in any case?
I could imagine selling a handful of shares to finance a big purchase like a house, but otherwise they shouldn't ever be cashing out while they're in charge. If they think they're serving the company, they should be holding onto their shares.
The flaw is the notion that they serve the company. This is a parasitic class which serves itself above all else.
Stock buybacks, where a company buys its own stock to inflate stock prices and reward shareholders, are reeaally common practices. Obviously, shareholders have to sell stocks to cash out.
All trading by corporate officers is, by definition, "insider trading".
But as long as they did it at the appropriate times (usually windows after earnings calls iirc) and file with the SEC it's fine.
We're gonna tank the company for money, everyone in this room sell all your stock over the next x months.
X months pass and the last sale of stock happens legally
Time for that announcement, send it.
https://www.investopedia.com/terms/r/rule-10b5-1.asp
Thanks - now that I've slept on it I believe the "after earnings call" applies to other non-officers of the company. I remember having some options that I could only exercise during certain times (HR would send us emails when those windows opened/closed).
Nope, just a scheduled sale of a minute portion of his held shares which he receives as part of his compensation and a minuscule amount of shares outstanding. He's sold over 50k shares this year, this is just a normal thing.
Trade windows are often for 30 or so days after earnings reports. Unity's Q2 shareholder letter was Aug 2nd this year. Could very well just be the usual trading window.
Has any executive uh ever been prosecuted for insider trading after stock buybacks?
Lol
CEOs and CFOs on occasion have protections against insider trading stuff.
Got a source on that?
Note the key takeaways section hence it's not always a breach of insider trading if the CEO/CFO does it. it really depends. It's a dumb escape mechanism people in power have.