The Associated Press reports today that Bluenile CEO Mark Vadon sold 4,000 common shares under a prearranged trading plan, according to a Securities and Exchange Commission filing this past Friday.
In a Form 4 filed with the SEC, Mark C. Vadon reported he sold 2,000 shares on Dec. 20 for $35.35 each and another 2,000 the next day for $35.51 apiece.
The stock sale was conducted under a prearranged 10b5-1 trading plan which allows a company insider to set up a program in advance for such transactions, and proceed with them even if he or she comes into possession of material nonpublic information.
Insiders file Form 4s with the SEC to report transactions in their companies’ shares. Open market purchases and sales must be reported within two business days of the transaction.
A closer look at the Insider Transactions at Bluenile shows that Mr. Vadon has consistently sold his company shares, totalling 212,149 shares sold since December 29, 2004 with no purchases. Indeed, there has been and continues to be heavy Insider Sales of Bluenile shares by the top Bluenile company executives since December 2004. In the last six months, Bluenile Insiders have sold 170,116 shares and bought 0 shares for their stock portfolios! Does this make sense?
The link is here: Bluenile Insider Stock Sales
Bluenile is currently the leading on-line Internet seller of diamonds and jewelry, reporting sales of 250 million in 2005. Analysts expect 2006 sales to equal or exceed this number.
Why then, are company Insiders selling their shares in droves? What are we missing in this picture? Any Stock Mavens out there with an answer?