The CEO of ASX-listed audio networking chip maker Audinate (ASX: AD8) sold shares in the company at $13.66 just 10 days before the company launched a capital raising $13 per share.
On September 6, 2023, Audinate announced that its CEO and co-founder Aidan Williams sold 51,702 shares in Audinate on August 28, 2023, one week after he received the same number of shares as a result of the vesting of performance rights.
While it is not remarkable that Aidan Williams would sell the shares he earned through the vesting of performance rights, what is remarkable is that the sale took place just 10 days before the company launched a $70 million capital raising at $13. That’s remarkably good timing, since a discounted capital raising often puts downward pressure on the prevailing share price. Of course, we won’t know if that occurs in this case until after Audinate shares start trading again.
I am not suggesting that Aidan Williams knew about the upcoming discounted capital raising at the time of selling his shares. Presumably, that decision was taken by the board of directors, of which he is but a single member, some time after his sale of shares.
With the Audinate share price rocketing after results, and the equity issue of up to $70m worth of shares at $13 likely to reduce demand for Audinate shares on market, any ordinary shareholders already inclined to take profits will no doubt be wondering if the period immediately following the results, but immediately preceding the capital raising, was the ideal time to do so.
Audinate remains one of the most interesting growth stocks on the ASX and you can read our coverage of the FY 2023 Audinate Results Via This Link.
Disclosure:Â The author of this article Claude Walker does not own shares in Audinate. He will not trade Audinate shares for at least 2 days following the publication of this article. This article is not intended to form the basis of an investment decision and is not a recommendation. Any statements that are advice under the law are general advice only. The author has not considered your investment objectives or personal situation. Any advice is authorised by Claude Walker (AR 1297632), Authorised Representative of Equity Story Pty Ltd (ABN 94 127 714 998) (AFSL 343937).
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