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Stocks

Firstsource Insider Selling

Some of the top management at FirstSource Limited sold nearly 90% of their holdings in November 2007.

On 8 Nov 07, Ananda Mukerji, CEO, sold around 20 lakh shares, about 80% of his holding (of 24 lakh shares). The price was in the 60s.

On 28 Nov 07, Raju Venkatraman, COO, sold 5 lakh shares, which was around 90% of his total holding of around 5.6 lakh shares.

Here is where we are today:

Firstsource Insider Trading 2007

I don’t have anything against them selling, but it’s important to note that:
a) Two top officers of the company unloaded SIGNIFICANT chunk of their own holdings.
b) This was two months after a significant acquisition announced (MedAssist).
c) The share crashed 30% below their sell levels.

The reasons for selling may be personal, but according to me the fact that they sold a HUGE chunk of their own shares is revealing. There could be other reasons of course, like getting fired or leaving the company etc. But those do not seem to have happened.

At Moneyoga, we’re writing code to provide warning of such actions. What will be interesting is to test this theory to go back and see whether there was a significant change when insiders sold in other companies. And if we can track that, we can get warned of some potential disasters waiting to happen.

Know any other companies that have had significant insider action?

  • enagar.com says:

    >is there any website that gives us the insider transactions listing (like yahoo does for US stocks)

    because NSE listing is on a daily basis and its hard to parse that info

  • Venkat Muthukrishnan says:

    >Look at KS Oils. In this case, it is the other way round. Promoter has bought huge chunks in the market over the last 1 month.

  • Deepak Shenoy says:

    >Enagar: No, hve to hand parse it off the NSE!

    Venkat: True, and the latest is a pretty HUGE buy of Indiabulls, by the promoters. I’m talking 70 crores each, very decent money. We should build a list.