NVIDIA’s founder, Huang Renxun, disclosed on Thursday his plan to sell 600,000 shares of NVIDIA stock, estimated to cash out $7.35 billion based on NVIDIA’s closing price on the 5th day. The community questioned if Huang Renxun was “harvesting leeks.” But is it really the case?
The stock price of artificial intelligence (AI) chip giant NVIDIA has skyrocketed this year, soaring nearly 150% so far, reaching a historic high of $1240 on Wednesday, making it the third company in US stock market history to surpass a market value of $3 trillion, briefly surpassing Apple to become the world’s second-largest company by market value.
However, after NVIDIA’s founder Huang Renxun announced the sale of his personal 600,000 shares of NVIDIA stock, and news of the US launching an anti-monopoly investigation against NVIDIA surfaced, NVIDIA’s stock price plummeted by nearly 6% on Thursday and closed down 1.14%. It also slightly declined by 0.09% on Friday to $1,208.88, with a market value falling back to $2.97 trillion.
According to the latest regulatory filings submitted by NVIDIA to the SEC, Huang Renxun submitted a 10b5-1 trading plan on March 14, planning to sell up to 600,000 shares of NVIDIA stock by March 31, 2025, with an estimated cash out of $7.35 billion based on NVIDIA’s closing price of $1,224.40. The 10b5-1 plan automatically executes trades when preset conditions are met, such as reaching a certain stock price or trading volume, to avoid insiders having an advantage due to significant non-public information.
After the news came out, there were many negative doubts online about Huang Renxun cashing out at the peak by selling 600,000 shares, “Realize profits! So many leeks,” “Eating the leeks,” “Creating a trap to kill”…
In response to these negative doubts, the Facebook fan page IEObserve International Economic Observation posted yesterday:
From the data compiled by finviz, it can be found that Huang Renxun has been selling personal shares irregularly since 2008, with the most recent being on September 14 of last year, when he acquired 29,684 shares of stock at $4 per share through stock options. He cashed out these shares at an average price of $455.75 per share, totaling $13.5 million. Since his last stock sale, NVIDIA’s stock price has more than doubled in less than 9 months.
There were also comments from netizens on the post: Most of Huang Renxun’s income is speculated to be in stock dividends, and it is normal to cash out stocks to maintain his life and pay taxes. “A real man, dedicated to his career,” “Cashing out is also normal, that’s what people earn,” “The only source of income, so one must manage their business seriously,” “Please shorts to pressurize the family”…
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