It is a common practice among company CEOs to divest their personal shareholdings, while also ensuring that the sale is timed strategically so as to keep a tab on insider trading.
That’s exactly what Evan Spiegel, CEO of social media company Snap Inc., did last week. Nearly a year after Snap went public, Spiegel sold 2.68 million shares of the company, which accounts for just above 1% of his total shareholding. The transaction, which was performed as per a pre-arranged sales plan, fetched him $18.71 per share.
What makes the 50-million dollar transaction special is the fact that it is the first ever stock sale by Spiegel, who had vowed not to sell shares in the first year after the IPO.
The sale does not materially change the 88% control he enjoys in the company and the Snapchat app, along with co-founder Bobby Murphy. In the New York Stock Exchange, Snap’s stock lost around 5% in pre-market on Tuesday, reversing some of its recent gains.
The transaction fetched Spiegel $18.71 per share
The company’s better-than-expected fourth quarter results had triggered a stock rally at the beginning of the month. A marked growth in user base helped it reduce operating loss in the December quarter, compared to the preceding quarter.
The other highlights of the quarter were the acquisition of ad tech startup Metamarkets and launch of the ‘hands-on augmented reality’ ads that allows users to interact with the products of a particular brand.
Recently, the company had subjected the Snapchat app to an extensive revamp, giving rise to a controversy over the aesthetics of the new design. A more precise picture of users’ response to the allegedly botched redesign is expected to emerge soon, as the app is currently being launched in other regions outside the US. Defending the new look of the app, Spiegel at a meeting said the changes were long overdue.
Meanwhile, market watchers are upbeat about Snap’s outlook, with the main positives being the effective measures adopted by the company to retain user base and to mobilize advertisement revenue.