One of the biggest financial stories of the week was the collapse of SVB Financial Group SIVB as the company's share price fell significant throughout the later portion of the week.
A look at recent insider transactions shows several sales happened prior to the drop in the share price.
What Happened: Silicon Valley Bank, a unit of SVB Financial Group, was closed Friday by the California Department of Financial Protection and Innovation. The Federal Deposit Insurance Corporation was named as receiver for the bank.
The company has struggled to raise additional capital, and concerns of cash burn and liquidity sent shares of the bank down significantly on Thursday and Friday before the stock was halted.
Prior to shares falling, several SVB Financial Group insiders sold shares of the stock, a move that is now drawing attention from investors and on social media.
Related Link: Exclusive: Jim Cramer Recommended SVB Financial In February, An Example Of His 'Reverse Midas Touch'
The Insider Sales: Benzinga’s Insider Trades page for SVB Financial Group shows several insider sales since the start of 2023.
On Jan. 5, Beverly Kay Matthews, who is the Chairman of the company, reported a purchase of 1,000 shares at an average price of $232.06.
On Jan. 24, Chief Marketing Officer Michelle Draper reported a sale of $20,000 in shares at an average price of $239.20.
On Feb. 3, Chief Marketing Officer Michelle Draper reported a sale of 809 shares at an average price of $239.54.
On March 1, Chief Financial Officer Daniel Beck reported a sale of 2,000 shares at an average of $287.59, totaling over $575,000.
The biggest insider transaction drawing attention is one reported on March 1 by Chief Executive Officer Gregory Becker. The CEO exercised 12,451 options at a price point of $105.18 and sold the acquired stock at prices ranging from $285.79 to $288.55 on Feb. 27.
The total sale was worth $3,578,652 netting Becker a profit of $2,269,056.
After the transaction, Becker owns 92,552 shares of SVB Financial Group in a revocable trust and 6,315 shares in a 401(k)/ESOP.
Becker joined SVB in 1993 and became the CEO in 2011.
“Under Greg’s leadership, SVB has achieved considerable growth. SVB joined the S&P 500 in 2018 and has been named one of the best banks in America, one of the fastest growing public companies in the U.S., and one of the best places to work,” the company’s website reads.
While executives are allowed to exercise options and sell stock as they see fit, the timing of this insider trade may be questioned by many and flagged by regulators to see if Becker knew of any problems prior to the bank’s collapse.
Some insider trades can be pre-scheduled and part of designated plans to sell shares at certain intervals.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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