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> He can sell his shares when he feels like it He, in fact, cannot. As a C level executive he is going to trade on a 10b5-1 schedule.

hx8 3y ago
Individuals trading on a 10b5-1 schedule have a lot of input on that schedule.
- rco8786 3y ago
  Months or years in advance. Yes.
jkukul 3y ago
Thanks for the insightful comment. I guess they can still conveniently schedule when the layoffs are announced and make it happen right before the 10b5-1 schedule? All the previous layoffs announcements were followed by the stock rising up.
- bradjohnson 3y ago
  Exactly. The 10b5-1 schedule is a layer of misdirection, but the executives still have their hands firmly on the levers of price manipulation.
  - rco8786 3y ago
    There is no way to know what effect a layoff will have on stock price in advance. This sale would have happened in the exact same way if the stock had tanked after the layoff.
    - RankingMember 3y ago
      > There is no way to know what effect a layoff will have on stock price in advance Sure, but looking at precedent gives you info to make a good bet- the last 2 Spotify layoffs this year each caused their stock to jump.
      - rco8786 3y ago
        Sure. It's possible he decided he wanted to use a layoff as a way to make a gamble on the stock price before a scheduled sale. However there is no actual evidence of this, so let's be careful about breaking out the pitchforks. This sale would have happened even if the stock tanked 50%.
        bradjohnson 3y ago
        It's not just Spotify layoffs that have caused stock pumps this year. Plenty of other large tech companies have experienced the same pump due to layoffs. It's a pretty good gamble. The 10b5-1 schedule is referenced often by executives as an alibi against insider trading. Let's just be realistic that it likely doesn't prevent anything of the sort.
        rco8786 3y ago
        It is. At best. A gamble. There are more than enough examples of companies doing layoffs and experiencing stock losses. Let’s be realistic that this trade was a) always going to happen no matter the stock price, b) the CEO does not have a crystal ball, and c) there is no evidence of the CEO timing layoffs as a ploy for personal gain. It’s easy to get caught up in conspiracies that we want to be true. Imagine if the timing were juuuust a little different, what the headlines would be. "Spotify CEO cashes in on millions before announcing layoffs". Hmmm.
        bradjohnson 3y ago
        It's weird to deny that executives can comprehend the impact of their decisions on the price of their ticker, but ok. > It’s easy to get caught up in conspiracies that we want to be true. I'm not saying there even needs to be a conspiracy for this specific case. I'm pointing out that there is nothing in the law that would stop them from taking advantage of this timing. Also that previous layoffs have resulted in a bump in share price multiple times in a row, and what do you know, it happened again. Even if it was a gamble, how can you deny that they're able to time information drops to their personal advantage? Isn't that a problem in itself?
- rco8786 3y ago
  > I guess they can still conveniently schedule when the layoffs are announced and make it happen right before the 10b5-1 schedule? This is still a gamble at best. Let's not go down a conspiracy rabbit hole here. CEOs have their trading schedules set well in advance, they do not know how the market will respond to their actions ahead of time. They can at best make an educated guess. But the idea that he scheduled this layoff specifically for personal gain is pretty unfounded.
chpatrick 3y ago
I meant on a "moral" level, not legally speaking. If he's doing his job as a CFO and he wants to sell shares when people are laid off, that's up to him.
- rco8786 3y ago
  > and he wants to sell shares when people are laid off, that's up to him. That's what I am saying...it's not up to him. It's up to him if he wants to lay people off right before he has a sale scheduled. But what he most definitely did not and cannot do is: lay people off, observe that the stock went up, decide to make a sale.

hx8 3y ago

Individuals trading on a 10b5-1 schedule have a lot of input on that schedule.

rco8786 3y ago
Months or years in advance. Yes.

jkukul 3y ago

Thanks for the insightful comment. I guess they can still conveniently schedule when the layoffs are announced and make it happen right before the 10b5-1 schedule? All the previous layoffs announcements were followed by the stock rising up.

bradjohnson 3y ago
Exactly. The 10b5-1 schedule is a layer of misdirection, but the executives still have their hands firmly on the levers of price manipulation.
- rco8786 3y ago
  There is no way to know what effect a layoff will have on stock price in advance. This sale would have happened in the exact same way if the stock had tanked after the layoff.
  - RankingMember 3y ago
    > There is no way to know what effect a layoff will have on stock price in advance Sure, but looking at precedent gives you info to make a good bet- the last 2 Spotify layoffs this year each caused their stock to jump.
    - rco8786 3y ago
      Sure. It's possible he decided he wanted to use a layoff as a way to make a gamble on the stock price before a scheduled sale. However there is no actual evidence of this, so let's be careful about breaking out the pitchforks. This sale would have happened even if the stock tanked 50%.
      - bradjohnson 3y ago
        It's not just Spotify layoffs that have caused stock pumps this year. Plenty of other large tech companies have experienced the same pump due to layoffs. It's a pretty good gamble. The 10b5-1 schedule is referenced often by executives as an alibi against insider trading. Let's just be realistic that it likely doesn't prevent anything of the sort.
        rco8786 3y ago
        It is. At best. A gamble. There are more than enough examples of companies doing layoffs and experiencing stock losses. Let’s be realistic that this trade was a) always going to happen no matter the stock price, b) the CEO does not have a crystal ball, and c) there is no evidence of the CEO timing layoffs as a ploy for personal gain. It’s easy to get caught up in conspiracies that we want to be true. Imagine if the timing were juuuust a little different, what the headlines would be. "Spotify CEO cashes in on millions before announcing layoffs". Hmmm.
        bradjohnson 3y ago
        It's weird to deny that executives can comprehend the impact of their decisions on the price of their ticker, but ok. > It’s easy to get caught up in conspiracies that we want to be true. I'm not saying there even needs to be a conspiracy for this specific case. I'm pointing out that there is nothing in the law that would stop them from taking advantage of this timing. Also that previous layoffs have resulted in a bump in share price multiple times in a row, and what do you know, it happened again. Even if it was a gamble, how can you deny that they're able to time information drops to their personal advantage? Isn't that a problem in itself?
rco8786 3y ago
> I guess they can still conveniently schedule when the layoffs are announced and make it happen right before the 10b5-1 schedule? This is still a gamble at best. Let's not go down a conspiracy rabbit hole here. CEOs have their trading schedules set well in advance, they do not know how the market will respond to their actions ahead of time. They can at best make an educated guess. But the idea that he scheduled this layoff specifically for personal gain is pretty unfounded.

chpatrick 3y ago

I meant on a "moral" level, not legally speaking. If he's doing his job as a CFO and he wants to sell shares when people are laid off, that's up to him.

rco8786 3y ago
> and he wants to sell shares when people are laid off, that's up to him. That's what I am saying...it's not up to him. It's up to him if he wants to lay people off right before he has a sale scheduled. But what he most definitely did not and cannot do is: lay people off, observe that the stock went up, decide to make a sale.