On Jeff Bezos and the late-Friday Form 4

Over the weekend, before news broke that Amazon CEO Jeff Bezos had bought the Washington Post for $250 million (there’s a seemingly endless number of links to this news and lots of analysis over at JimRomenesko), there was speculation in several corners of the internet, including this article on Quartz, over what this Form 4, filed on Bezos’ behalf, might have signaled in advance of Monday afternoon’s news. The filing, made at 7:30 pm on Friday night, which as footnoted regulars know is primo Friday Night Dump time — showed that Bezos had sold 614,938 shares worth about $185 million on August 1 and 2.

As we tweeted yesterday, we don’t pretend to be experts on insider transactions. Still, it seemed a tad too convenient to imply that the sale, which a footnote to the filing noted was under a 10b5-1 plan previously established by Bezos, was somehow tied to the purchase of the Post. After all, with a net worth estimated at $25.2 billion, it’s not like Bezos needed to sell stock to make this happen.

Because we’re not experts in insider transactions, we reached out to our friends at SmartInsider, who are. They looked at several years worth of Form 4s for Bezos and found that Friday’s “big sale” really wasn’t so big, when placed into historical context. Here’s a snip from SmartInsider:

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What the chart shows is that so far this year, Bezos has sold around $235 million worth of stock, which was more than the $202 million sold last year, though Amazon stock was trading lower in 2012. In 2011, there weren’t any sales. But in 2010, Bezos sold $780 million worth of Amazon stock. We haven’t been able to find any specifics on Bezos entering into a 10b5-1 plan in the filings. But as the WSJ reported last December, the lack of transparency on 10b5-1 plans is pretty common. So finding any significant details on these plans is kind of like finding a rare black truffle.

The bottom line? It’s easy to read SEC filings in a vacuum and assume that a particular filing means a specific thing. It’s much harder to detect and understand the various patterns that make filings such a treasure trove of information!