
Tim Cook Sells Millions in Apple Stock - spking
https://www.marketwatch.com/articles/apple-ceo-tim-cook-sells-apple-stock-51567009228
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cek
This is not news.

The timing of the sales was predetermined under what is known as a 10b5-1
plan[1], named after an SEC regulation that allows company insiders to avoid
insider trading charges by setting up a schedule of sales in advance
(typically a year).

[1]
[https://www.investopedia.com/terms/r/rule-10b5-1.asp](https://www.investopedia.com/terms/r/rule-10b5-1.asp)

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windexh8er
The predetermined sells side still has a loophole. Executives generally build
their schedule in a relatively aggressive manner and cancel sells as they see
fit.

I only know because I drove a CEO for the company I worked for to a meeting
and we got to talking about stocks. He explained this loophole to me as his
way to effectively trade how he wants with legal protection from insider
trading.

From Wikipedia: "After Rule 10b5-1 was enacted, the SEC staff publicly took
the position that canceling a planned trade made under the safe harbor does
not constitute insider trading, even if the person was aware of the inside
information when canceling the trade. The SEC stated that, despite the fact
that 10b5-1(c) requires trades to be irrevocable, there can be no liability
for insider trading under Rule 10b-5 without an actual securities transaction,
based on the U.S. Supreme Court's holding in Blue Chip Stamps v. Manor Drug
Stores, 421 U.S. 723 (1975)." [0]

[0]
[https://en.m.wikipedia.org/wiki/SEC_Rule_10b5-1](https://en.m.wikipedia.org/wiki/SEC_Rule_10b5-1)

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skizm
If you sell immediately after your stocks vest, do you pay capital gains tax,
or normal income tax? Does the clock start ticking while stock is vesting or
after?

~~~
pavlov
RSUs (Restricted Stock Units) are taxed as income when they vest.

Typically shares are withheld to pay the tax before you ever see them. I.e. if
your tax rate is 50% and you're getting an award of 100 shares, you'll only
receive 50 shares in your account.

After that the shares are treated as if you'd purchased them at market rate.
If you sell them immediately, there's no capital gain and no further tax to
pay.

~~~
chongli
Where do the other 50 shares go? Is the government holding billions of dollars
worth of shares in private companies? Or do they immediately put them on the
market? Seems like that might distort the price.

~~~
mytailorisrich
It's called "sell to cover": All the shares vest, then a number of them are
automatically sold on the open market and the proceeds are withheld to cover
the income tax liability.

It's often possible to choose between doing that or keeping all the shares and
paying the tax liability out of your salary.

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kilroy123
Not that news worthy...

Zuckerberg sold $400 million worth in the last month. I think that's more news
worthy.

~~~
ceejayoz
No more than when I liquidate 0.5% of _my_ net worth.

(Zuck's funding his foundation, incidentally, and has been for years.
[https://www.vox.com/2018/2/14/17012846/mark-zuckerberg-
faceb...](https://www.vox.com/2018/2/14/17012846/mark-zuckerberg-facebook-
stock-sale-chan-zuckerberg-initiative-czi))

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Traster
To clarify something, whilst it's the timing of this is determined by a 10b5-1
plan the decision of how many shares to sell was entirely Cook's and it's not
entirely un-newsworthy. It's generally considered a not great sign that the
CEO of a company is so confident in it that he doesn't want to hold any stock
in the company, and there have been times where this has preceded problems
-for example Krzanic at Intel notably sold off all but his board required
minimum in the year before he got fired.

~~~
mytailorisrich
No expert but I believe that in a 10b5-1 plan both the timing and the number
of shares are predetermined.

If only the timing is predetermined then it defeats quite a bit of the
purpose. Basically the idea is that the person cannot interfere with anything
once the plan is set and thus cannot be accused of insider trading.

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cryptozeus
Flag and move on. Insiders sell their stock every day, can be multiple reasons
and may or may not have anything to do with what apple is doing.

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wheelerwj
if I'm reading this right, he sold off his entire award that vested last week.

~~~
C1sc0cat
You can't sell shares you got ten years ago and not the ones you got
yesterday.

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harryh
You can actually.

If you own shares in a company with different purchase dates you can designate
which ones you are selling. There can be tax reasons to choose one batch or
another.

~~~
C1sc0cat
I was referring to the previous comment which implies that Tim was selling his
most recent shares and not his oldest.

Sorry if it wasn't clear I must remember to write for ESL NH users.

~~~
wheelerwj
I'm a native English speaker and I still have no idea what you were trying to
say.

> You can't sell shares you got ten years ago and not the ones you got
> yesterday.

What do you mean?

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bluedino
Didn't he sell a bunch of stock around this time in 2017 and 2018 as well?

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cweto
Are the new iphones that bad?

~~~
gwbas1c
To quote the currently highest-voted comment:

> The timing of the sales was predetermined under what is known as a 10b5-1
> plan[1], named after an SEC regulation that allows company insiders to avoid
> insider trading charges by setting up a schedule of sales in advance
> (typically a year).

A big pile of stock is worthless if you can't sell it. Cook probably wants to
diversify, buy a house, boat, fancy car, and whatever else rich people like to
do with their money.

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cryoshon
another bad sign for the economy. the people with insider knowledge are trying
to bail from the market ASAP to lock in their gains from the long run of
economic growth.

~~~
navigatesol
> _the people with insider knowledge are trying to bail from the market_

1\. Is there any evidence that these insiders are good at market timing?

2\. It would be illegal, risky and stupid for the CEO of one of the biggest
companies in the world to dump stock on obvious insider knowledge. Do you
really believe Tim Cooke is going to stake his entire coproate reputation for
another few million bucks when he's already filthy rich? Maybe, but I'm
skeptical.

