KLA insiders sold $64M in shares as stock lost 40% of value

Since June 30, shares of KLA Corporation, an AI-focused semiconductor firm, have dropped 40%. The company’s market value fell by $160 billion during that period, while executives and other insiders reported sales totaling over $64 million in filings with the SEC, according to disclosures.

The company says most of the sales were part of executive compensation packages and followed regularly scheduled trading plans. However, no insider made any open-market purchases over the same period.

• President Richard Wallace led the selling at $17.4 million
• CFO Bren Higgins sold $13.9 million
• Executive Vice President Brian Lorig and Officer Mary Beth Wilkinson each sold more than $12 million
• President of Semiconductor Products Ahmad Khan sold $6.6 million
• Senior Vice President Virendra Kirloskar sold $1.8 million

KLA’s stock peaked at $307.37 on June 30, an all-time high. It closed at $183.77 the day before this report.

The market cap decline was more than $160 billion, falling from $401 billion to $240 billion as of the previous close.

Each insider sale took place at a different date and price, so the transactions were spread across the 40% stock decline rather than occurring all at once.

Investors who bought KLA during the summer AI stock frenzy are now facing significant losses. A $10,000 investment made at the June 30 high is now worth under $6,000.

KLA insiders sell for many reasons, haven’t bought for any reason

The vast majority of the sale filings included a Rule 10b5-1 representation. Such prearranged trading plans offer a legal defense against insider trading allegations.

These plans must be set up in advance and operate under the rule’s requirements. The filings do not indicate that KLA’s insiders anticipated any price drop.

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It is worth noting that the lack of buying does not prove KLA is overvalued. Planned selling is also not necessarily a sign that insiders are bearish.

Still, the pattern of only selling with zero buying could make some investors uneasy.

The most recent insider trading filing was submitted to the SEC’s EDGAR system on August 14, covering a sale from August 13.

Later sales in August may not have reached EDGAR yet, though public companies are required to report insider trades promptly.

A qualifying insider trade must be reported on SEC Form 4 by the end of the second business day after the transaction date.