It's always big news when a director, CEO or insider of an ASX 200 company sells out of a significant portion of their own shares. But when a co-founder unloads $122 million worth of shares? Well, that's certainly worth talking about.
That's the situation confronting Magellan Financial Group Ltd (ASX: MFG) investors right now.
According to ASX filings, Magellan co-founder Chris Mackay has just sold 12 million ordinary Magellan shares for a sale price of $9.40 per share. That translates into a sale worth $112.8 million, which occurred on 23 August.
The shares were held by Mackay's company, Magellan Equities Pty Limited, in which both he and members of the Mackay family have an interest. This parcel represents the vast majority of Mackay's interest in Magellan, the ASX 200 company he co-founded. He owned around 15.3 million shares before this sale, so presumably, he still retains approximately 3.3 million shares.
Who is Chris Mackay, and why is he selling out of his ASX 200 company?
Mackay, along with former Magellan boss Hamish Douglass, founded Magellan back in 2006. He has not had an active role in the ASX 200 company for many years now. That's aside from a brief stint last year when Mackay stepped in as chief investment officer following the resignation of Douglass.
Since 2012, Mackay has concentrated on his rule as chief investment officer at MFF Capital Ltd (ASX: MFF), the old Magellan Flagship Fund that is now run at arm's length as a separate listed investment company (LIC).
What's interesting about this sale from Mackay is its timing. The Magellan share price has been sliding for years now.
Magellan stock last peaked back in early 2020, topping out at over $65 a share. A series of issues since then, including the messy departure of Douglass, weak investment performance, and a massive loss of funds under management (FUM), have caused massive damage to the Magellan share price.
As has major sales from Douglass' own portfolio.
Today, Magellan shares remain down by 28.5% over the past 12 months and down more than 85% from its all-time highs.
But the Magellan share price has also bounced meaningfully in recent months. Since hitting a new multi-year low of $7.52 earlier this year, Magellan has rallied considerably, up more than 23% from that low. So perhaps this rally is why Mackay has just decided to sell out of this significant stake. He has given investors no explanation for this massive sale.
This news is probably not what Magellan's investors wanted to hear today.
