According to a federal securities filing, Microsoft (NASDAQ:MSFT) chief executive Satya Nadella sold about half his stake in the company last week.  

A total stock-shares of 838,584 were sold between $334.37 and $349.22, reducing Nadella’s total holdings to 830,791 shares. According to InsiderScore, this is the single-largest stock sale for Nadella.

In 2014, when Nadella took over as Microsoft’s third CEO of Microsoft, the company faced enormous difficulty.  

Since then, Nadella had overseen a turnaround in Microsoft’s fortunes and transformed the company into one of the most valuable companies globally as he shifted the business to focus on cloud computing and selling to large enterprises.

Microsoft’s cloud business became the core growth engine for the company, and during the pandemic, the company’s business has accelerated even faster. 

NOTE: Investors must consider Microsoft’s cloud growth and the expansion of its ecosystem before selling their stocks

Company revenue surged from $86.8 billion in fiscal 2014 to $168.1 billion in fiscal 2021, ending this June. The growth stream propelled Microsoft’s market cap from approximately $300 billion in 2014 to nearly $2.5 trillion today, up 780%.

WHAT DOES THE STOCK SALE MEAN?

Nadella’s total compensation rose 13% to $49.9 million in fiscal 2021, and the latest sale thus represents accumulative stock bonuses over the years.  

According to analysts, the move might also be linked to Washington state launching a 7% tax for long-term capital gains. The tax changes will apply for amounts exceeding $250,000 a year from the start of 2022.

Director of Research, Ben Silverman at InsiderScore, said the sale is similar to Tesla Inc. CEO Elon Musk’s recent stock sale, taking advantage of gains in the company’s stock price.

“There’s lots of savviness going on with the superwealthy in terms of trying not to spook the stock while taking advantage of market froth and getting ahead of tax-code changes.” – Mr. Silverman.

Microsoft shares were $337.31 on Monday afternoon, up 2.3%.


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Resources:
https://www.nasdaq.com/articles/why-is-everyone-talking-about-microsoft-stock
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