Corporate insiders at Nvidia (NVDA) are selling stock after the microchip and semiconductor company’s share price rose 225% this year.
The tripling of Nvidia’s share price has made it the best-performing company listed on the benchmark S&P 500 index in 2023. However, the strong performance has many insiders at the company offloading their stock.
Regulatory filings show that Nvidia executives and board directors sold 370,000 shares of company stock worth $180 million U.S. in November.
The November share sales at Nvidia represent the biggest monthly disposal, by dollar value, in at least six years.
The big stock sale in November comes as Nvidia’s stock begins to pullback after reaching a 52-week high of $505.48 U.S. per share on Nov. 20.
The company’s stock has fallen 6% since Nov. 21 when Nvidia’s third-quarter financial results were released.
While Nvidia’s Q3 results beat expectations and management forecast revenue in the current quarter that exceeded the average analyst’s estimate by $2 billion U.S., there are concerns about sales of the company’s microchips in China.
U.S. export controls ban Nvidia from selling its high-end chips and semiconductors to China, which had accounted for 25% of the company’s annual sales.
While Nvidia has announced plans to sell less powerful microchips to China that meet U.S. laws, there is skepticism about whether that strategy will prove effective.
In addition to the current stock sales by corporate insiders, regulatory filings show that senior executives and board members haven’t made any purchases of Nvidia stock since 2020.
In a statement, Nvidia said that most of the stocks sales are based on 10b5-1 plans, in which the price, amount, and dates of the sales are set in advance and have nothing to do with the current share price.
Still, insider selling of stock is typically viewed as a negative while insider buying of company shares is taken as a vote of confidence by investors.
Insiders who sold Nvidia stock in November included Mark Stevens, a board director since 2008 who sold 10,280 shares between Nov. 24 and Nov. 27. He still has a stake in Nvidia worth $2 billion U.S.
Other insider sellers included Debora Shoquist, executive vice president of operations, and Dawn Hudson, who joined Nvidia’s board of directors this past July.
Nvidia’s stock has increased 225% this year and currently trades at $467.65 U.S. per share.
