The A2 Milk Company Ltd (ASX: A2M) share price has come under pressure today and is dropping lower.
In afternoon trade the fresh milk and infant formula company’s shares are down 2.5% to $17.55.
Why is the a2 Milk Company share price dropping lower?
As well as general market weakness, investors have been selling the company’s shares after it revealed heavy insider selling following its full year results release.
According to a change of director’s interests notice, the company’s Chair and Non-Executive Director David Hearn has offloaded a large number of shares this week.
The notice reveals that Mr Hearn sold 250,000 of the company’s New Zealand listed shares through an on market trade on 24 August for an average of NZ$20.31 per share (~A$18.57). This represents a total consideration of NZ$5,077,500 or approximately A$4,642,500.
It also represents 19.1% of the chairman’s holding, reducing his stake down from 1,305,000 shares to 1,055,000 shares.
Mr Hearn isn’t the only seller of shares. In a series of other notices filed with the NZX, and not the ASX, it was revealed that the company’s chief executive has been selling shares as well. Geoffrey Babidge sold 100,000 shares on market on 24 August.
But the biggest seller of all has been the Asia Pacific chief executive, Peter Nathan. After exercising 800,000 options at NZ$0.63 per option on 19 August, he swiftly sold 750,000 shares between 24 August and 26 August for an average of NZ$20.12 or a total consideration of almost NZ$15.1 million. He is left owning 100,000 shares.
Joining the selling was Chief Growth and Brand Officer Susan Massasso and Chief Operations Officer Shareef Khan.
Massasso offloaded 541,391 shares through on market trades. Whereas Khan exercised 400,000 options for NZ$0.63 and then promptly sold 200,000 shares for NZ$19.87 per share.
No explanation was given for the share sales, which is disappointing given the magnitude of these transactions.