- Armstrong sold $1.8 million worth of stock to the exchange
- The stock price dropped 15% after the SEC lawsuit
- It raised questions from the cryptocurrency community
Data from Dataroma shows that Coinbase CEO, Brian Armstrong, sold $1.8 million worth of company stock on June 5. Before that, on June 6, it became known about the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against the company. This news caused the stock to drop more than 15%.
June 5 Brian Armstrong sold 29,730 shares of Coinbase in eight tranches. Selling prices ranged from $56.70 to $63.79. Just a day later, on June 6, the shares of COIN were down more than 15%, dropping to less than $50. At the time of publication, they had recovered slightly to the $54.90 level, a 3.22% discount from the lowest selling price on Armstrong.
Previous stock sales that preceded the SEC lawsuit have raised fears in the cryptocurrency community. Some believe that it may have been known in advance that the lawsuit was coming. Fox Business reporter Eleanor Terrett refuted these notions, claiming that stock sales have been scheduled in advance since August 2022 under SEC Rule 10b5-1.
Company officials can make anticipated stock sales plans using Rule 10b5-1, which set predetermined details, such as price, quantity and date. However, it is important that they confirm that they do not have non-public information.
Terrett added:
“I have been told that scheduling the sale on the 1st Monday of the month/beginning of the 3rd fiscal quarter is not unusual.”
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