Despite sanguine predictions by several major analytical firms that the shares of GT Advanced Technologies (NASDAQ:GTAT), Apple Inc.’s (NASDAQ:AAPL) sapphire-manufacturing ally, have an anticipated price target of $22 to $29 per share, the Vice President of GTAT’s Asia division sold off tens of thousands of shares yesterday, according to a Securities and Exchange Commission (SEC) filing. Jeffrey John Ford has liquidated over half his existing portfolio of GTAT stocks this week, and exercised an option to buy nearly 8,000 more shares, which he immediately sold also.
GTAT’s stocks witnessed a powerful gain in value when the company’s role in sapphire production for Apple (AAPL) came to light earlier this year. Trading for as little as $3.44 before then, the stock has since gained in value, hovering in the $13 to $15 range with occasional spikes to $19 or so. This prompted “Buy” ratings from a number of prominent analysis firms. Goldman Sachs’ price target is currently $22, while Dougherty & Co. are more optimistic, setting their GT Advanced Technologies stock price target at $29 per share.
This rose tinted outlook is, perhaps, slightly contradicted by the actions of Mr. Ford, who, as described in an SEC Statement of Changes in Beneficial Ownership form, sold off 24,275 shares in GTAT last Friday and an additional 23,400 shares on Monday. In total, the Vice President of Asia operations for the company liquidated 47,675 shares out of an original total of 92,666. This represents 51.4% of his entire holdings of his own company’s stock.
Furthermore, Mr. Ford exercised his stock option right to buy to acquire a further 7,755 shares of GTAT at a price of $5.44 per share. He then liquidated them immediately at $13.25 per share, for a net profit of $7.81 per share, or $60,566.55 in total. Combined with the sales of existing shares noted above, this means that Mr. Ford has converted $697,971.61 of investments in the company he works for into cash.
The implications of these actions are interesting, though speculative. They could be viewed as doubt on Mr. Ford’s part that GTAT’s shares will ever reach $29 per share, or even $22. Indeed, it is possible to construct an argument that he has reason to believe that the current price of $13 to $14 per share is the peak for the foreseeable future, and prices are likely to drop from here.
This, of course, is second guessing the investor’s private reasons, which could have another source entirely. He may have found an investment likely to produce an even higher yield, or a quicker one, causing him to pull money out of GTAT to snap up whatever juicy investing morsel he or his broker discovered. The VP could also simply have need of a large amount of cash quickly. However, any piece of data relating to a company so closely tied to Apple Inc. (AAPL) could be potentially useful to an investor with money in either firm.
