To The Moon

Only a handful of US chief executives made well-timed stock buys during the tariff-induced market panic in April 2025, as trading restrictions forced them on to the sidelines. According to data provider VerityData, only two CEOs at companies worth more than $5 billion ‘bought the dip’ when the market fell. Instead, a larger group of executives sold shares before Donald Trump’s “liberation day” announcements. This included bosses of Pepsi and $Jazz Pharmaceuticals PLC(JAZZ)$. Insiders often buy their own shares when markets are down. However, many executives were unable to jump on cheap shares because “liberation day” came as much of corporate America was barred from dealing ahead of first-quarter earnings. VerityData, VP of research, Ben Silverman who tracks company executives & directors’ share dealings based on regulatory filings, commented: The timing of the market disruption could not have come at a worse time for insiders because quarterly trading windows are closed at most US companies. Buy The Dip ! CEOs who were able to buy, saw it pay off. $GameStop(GME)$ On 03 Apr 2025, meme stock GME, CEO, Ryan Cohen bought 500,000 shares at $21.55. In the days after the sell-off as the market calmed, GameStop’s shares closed at $26.78 on 17 Apr 2025. With a relief rally in the past 2 days, GME price is currently stagnating at $27.12 as of 23 Apr 2025. Cohen, who is GameStop’s 2nd-largest shareholder, last bought GME stock back in June 2023. $Applied Materials(AMAT)$. On the same day, AMAT, CEO, Gary Dickerson also bought 50,000 shares at $137. On 17 Apr 2025, it has risen as high as $139.53 intraday, before closing lower at $137.46 for the week, still with a marginal profit of $0.53 per share. As of 23 Apr 2025, AMAT closed the day at $143.58 per share, still rising if you asked me. Other board directors at Dollar Tree (DLTR)$ and Salesforce (CRM)$ bought about $500,000 and $1million respectively during the sell-off. Compliant and Bought. Explaining above behaviour, Wharton School, Accounting professor, Daniel Taylor offered the followings: Based on academic research, corporate insiders can be known to be contrarians. When there is a big drop, it has been observed that insiders started buying at the bottom. Staying compliant, insiders at some companies started snapping up shares quickly after their earnings announcements. $Goldman Sachs(GS)$. On 15 Apr 2025, , GS’s board director, John Hess bought $2 million shares, one day after the bank reported earnings. Historically, buying is extremely rare for Goldman insiders. Disclosures showed that Hess’s purchase was only the second at the bank since January 2009. To avoid falling foul of insider trading rules, company insiders have to (a) disclose their transactions and often (b) have trading plans in place to automatically sell stock at certain times and share prices. Sellers. Still, some corporate insiders sold stocks on two separate occasions: After Trump’s election win in November 2024. Between Trump’s inauguration (January 2025) and tariffs’ announcement (April 2025). $Pepsi(PEP)$. Hindsight is always 20/20. Looking back, the signs (now) seemed obvious. On 04 Feb 2025, Pepsi has highlighted its risk disclosures stating that US’s new tariffs on China, Mexico, Canada, and other countries could disrupt operations, in its annual report. Barely a month later, in early March 2025, six Pepsi executives collectively sold $18.4 million of stock when Pepsi’s shares were above $150: CEO, Ramon Laguarta sold 50,000 shares for $7.7 million, his largest sale at the company. Interestingly enough, regulatory disclosures also showed that these sales were not part of a preset trading schedule, Pepsi’s stock closed at $142.26 on Wed, 23 Apr 2025, trading down -5.29% YTD. Pepsi declined to comment on CEO’s shares sales. At other companies, executives accelerated their share sales as part of their stock trading plans. Exceptions. Strangely enough, at Microsoft (MSFT)$, there is no record of insider selling, so far this year (2025). It is the longest pause in selling since 2022. Perhaps, the tech giant’s shares -10.56% YTD decline has something to do with it ? (see above) Summary. The news article from Financial Times highlighted the: Importance of insider trading policies. Sometimes-contrarian nature of insider activity. Broader uncertainty affecting corporate America’s leaders. Even if there is no regulatory framework to restrict and regulate, it is not necessarily true that most CEOs would buy the dip during a market crash. This is because: During the recent market turmoil, the insider buy-sell ratio fell to its lowest point since 1988. (see below) In early February, the insider buy-sell ratio fell to 0.22, the lowest since 1988, indicating that corporate executives are more inclined to reduce their stock holdings rather than increase them. (see below) The Kobeissi Letter pointed out that excessive optimism in risk assets has reached an 'unsustainable level', and this trading data may be a precursor to an upcoming market correction. Is this a coincidence or precise prediction? Whatever the case maybe, only you can answer the million-dollar question based on your risk appetite and conviction (how strongly) about a stock or stocks. Agree? Must Read: Click on below titles to access. 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