Pfizer’s CEO Dumps 62% Of His Stock On COVID Vaccine Announcement
November 11th, 2020Your what hurts?
Via: ZeroHedge:
On Monday, Pfizer shares soared 16% following a bullish statement on the company’s experimental COVID-19 vaccine showed 90% effectiveness in preliminary results. Then on Tuesday, according to a Securities and Exchange Commission filing, Pfizer CEO Albert Bourla sold 62% of his stock.
Bourla’s sale was conducted under Rule 10b5-1, established by the SEC, allowing the corporate insider to sell a predetermined number of shares at a predetermined time. A Pfizer spokesperson told Axios that the CEO’s predetermined trading plan was formed in August.
Despite the sale being perfectly legal under Rule 10b5-1 to avoid accusations of insider trading, the optics aren’t great for Bourla, who still managed to top-tick the 52-week-high on the sale on news day. One can argue that he couldn’t have known the results of the vaccine trial months ahead of time. And while all this is coming out just days after a critical US election, though it’s not clear if that was a trigger.
“One can argue that he couldn’t have known the results of the vaccine trial months ahead of time”
“the CEO’s predetermined trading plan was formed in August”
No one knows the future, BUT, when you’re in the industry and see lab results, you DO know when a certain compound performs orders of magnitude better than others in animal experiments. And you know exactly the timelines required by regulatory agencies for human trials. These are all spelled out, in detail months in advance. So as CEO, I would have certainly known back in August if my company had a compound that was likely to show amazing results in early trials, and I would have known exactly when those trials would have been completed and reported in the media. So making a strategic plan for stock sales back in August is trivial. What he did was totally legal, but it’s legalized insider trading (at least in the pharmaceutical industry. I have no idea how rule 10b5-1 affects “insider trading” in other industries)