Many investors have been tracking Nvidia’s (NASDAQ: NVDA) remarkable success, but an equally close watch has been kept on the company’s CEO, Jensen Huang, as he continues to sell significant portions of his NVDA shares.
Once again, Nvidia CEO Jensen Huang is selling stock. In a transaction on September 11, Huang sold over $26 million worth of shares.
Notably, this adds to the more than $633 million in Nvidia stock he has sold since June 2024, according to the latest insider trading insights.
Is Huang dumping on Nvidia share holders?
So, is Huang bailing on Nvidia while touting its growth to outside investors? Not quite. Most of his sales are linked to restricted stock units (RSUs) and performance stock units (PSUs)—stock grants tied to his compensation package.
RSUs are commitments made by the employer to award shares to an employee at a future date, provided certain conditions are met, such as continued employment. PSUs, on the other hand, are tied directly to the company’s performance, rewarding employees with shares when specific business goals are achieved. Huang, like many other Nvidia executives, regularly sells these stock units as they vest.
It’s important to note that such sales are a common practice among executives and don’t necessarily indicate a lack of confidence in the company’s future.
For instance, Huang still holds 3.51% of Nvidia stock, a sizable stake.
Moreover, insiders like Huang must follow SEC rules, such as 10b5-1 trading plans, which allow them to sell shares on a predetermined schedule, providing transparency and reducing concerns about timing the market.
Despite the ongoing sales, Nvidia remains in a strong position and is poised for continued growth, driven by its dominance in AI and semiconductor technology.
Investors shouldn’t be too rattled by these insider transactions, as they are often part of routine financial planning for executives with substantial stock-based compensation.
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Source: https://finbold.com/tracking-nvidia-ceos-share-sales-in-2024/