GameStop Director dumps $60 million in GameStop stock

[Queasy]

Gamasutra - you know, other than others jumping into the used game markets and the rise in digital downloads...

GameStop director Leonard Riggio has sold 2.3 million shares in the company, in a move that analysts say might be a sign of pessimism on the retailer's near-term prospects.

Riggio -- also board chairman and founder of the Barnes & Noble bookstore chain, which used to own GameStop -- earned $60.2 million through the sale, and lowers his stake in the company to 5.5 percent from 6.9 percent.

"Unless he desperately needs $60 million," it appears that he doesn't think the stock is going to be performing very well, insider trading firm Form4Oracle co-founder Alex Romayev told financial magazine Barron's. "He's got a lot bigger stake in Barnes & Noble. Clearly he thinks selling GameStop is better than selling Barnes & Noble."

Most analysts have been generally positive on the retailer's prospects ahead of the key holiday season, thanks to hardware price cuts, improved year-over-year comparisons likely ahead, and the view of retailers like Best Buy that consumer foot traffic is about to make a return.

But Romayev told Barron's that the last time Riggio made a GameStop shares sale not related to options, he divested just in time to avoid a 62 percent loss.

 

[RyanPaulShaffer]

Wouldn't this be a case of insider trading? A guy who works for the company uses his knowledge as a high-ranking GameStop employee to make a stock decision.

I don't really know, which is why I'm asking, but this seems suspect to me.

 

[Queasy]

Originally posted by: RyanPaulShaffer
Wouldn't this be a case of insider trading? A guy who works for the company uses his knowledge as a high-ranking GameStop employee to make a stock decision.

I don't really know, which is why I'm asking, but this seems suspect to me.

It depends. Board members and CEOs have to get the stock sales of their own company approved by the SEC if I've got that correctly.

 

[erwos]

Originally posted by: RyanPaulShaffer
Wouldn't this be a case of insider trading? A guy who works for the company uses his knowledge as a high-ranking GameStop employee to make a stock decision.

Using this logic, you'd never be able to sell stock in a company you were also employed at as an executive. No, this is not the case.

If you think your company is going to do badly (or not as well) in the future, it's not insider trading to sell your stock on that premise. Now, if you know that the earnings call next week is going to be way worse than predicted by analysts, and then you sell right then and there, that's insider trading.

Because of this, I believe that executives are forced to declare their stock sales in advance... if the guy said he was going to sell stock three months ago (or, more likely, he's going to sell in three months from now), that's not really the time frame for insider trading, and he's still exposed to any bad quarterly events.

 

[zerocool84]

Well seeing as Gamestop is one of the very few companies that's still making money in this recession, something smells fishy to me.

 

[Krakn3Dfx]

Maybe he's just pulling out of one area and moving into another. Maybe he's buying a new house. A really nice house.

 

[BlueWeasel]

Maybe he read this post 😉

 

[UpgradeFailure]

Kinda weird he sold it right before the holiday season

 

[nitromullet]

Originally posted by: Queasy

Originally posted by: RyanPaulShaffer
Wouldn't this be a case of insider trading? A guy who works for the company uses his knowledge as a high-ranking GameStop employee to make a stock decision.

I don't really know, which is why I'm asking, but this seems suspect to me.

It depends. Board members and CEOs have to get the stock sales of their own company approved by the SEC if I've got that correctly.

I don't think they have to get them approved so much as the have to report them.

 

[DaveSimmons]

It's because the PSP Go is selling so well that the PS4 and X720 are both going to be downloads-only 🙂

 

[Redshirt 24]

...and all I can think of is this week's episode of CSI: Miami and Arnie in Total Recall going "Get your ass to Mars."

Selling a few grand, or even a few hundred grand, of stock isn't that weird. Sixty million dollars...that's get-the-hell-out-of-Dodge level stuff, IMO...

 

[Injury]

Originally posted by: erwos

Originally posted by: RyanPaulShaffer
Wouldn't this be a case of insider trading? A guy who works for the company uses his knowledge as a high-ranking GameStop employee to make a stock decision.

Using this logic, you'd never be able to sell stock in a company you were also employed at as an executive. No, this is not the case.

If you think your company is going to do badly (or not as well) in the future, it's not insider trading to sell your stock on that premise. Now, if you know that the earnings call next week is going to be way worse than predicted by analysts, and then you sell right then and there, that's insider trading.

Because of this, I believe that executives are forced to declare their stock sales in advance... if the guy said he was going to sell stock three months ago (or, more likely, he's going to sell in three months from now), that's not really the time frame for insider trading, and he's still exposed to any bad quarterly events.

Insider trading is most easily described as making stock moves based on information that is not available to the public.

Examples:

- You have stock in your company and you sell it before an earnings report showing bad results is made public
- Your company is in talks to buyout another company; You purchase stock in that company before a the deal is signed and the news made public.
- Company Y puts in a bid and is the forerunner to manufacture Product X for your company. Your boss tells you during lunch that Company Y is going to get the contract. You buy stock in Company Y; The following day, their bid is chosen to produce Product X.


Insider trading is the sort of thing that needs to be investigating and proven in just about every case. It's not always clear cut but the general idea is that anything that is public knowledge or not swayed by your job is okay.

 

[StageLeft]

How much stock does he own is the question. It's not insider trading if done during certain periods of time and it's not hidden.

 

[erwos]

Originally posted by: Skoorb
How much stock does he own is the question. It's not insider trading if done during certain periods of time and it's not hidden.

Well, simple math would seem to indicate he's got like $180m left...

 

[smackababy]

CEOs schedule large stock sales months before they actually sell it. It isn't a sign of anything. What is the point of having all your assets in a single company?

 

[Golgatha]

He just got specs for the PS4 and XBox 1080; both of which did not include optical drives, but had 1TB hard drives as standard.

 

[herkulease]

its likely nothing. As other said as an executives and/those who large shares schedule their sales in advance. Bill Gates sells MS stock every quarter. People who don't know this read and think OMG Microsoft is gonna die. Bill Gates dumping it. I'm sure Bill really needed the 380 million in August. Wife really wanted some shoes and bags.