The Netwealth Group Ltd (ASX: NWL) share price dropped by 0.6% following the news that the S&P/ASX 200 Index (ASX: XJO) tech share's founder had decided to sell a large amount of shares.
For readers that don't know, this business is a financial services company that provides wealth management services, including superannuation accumulation and retirement income products, investor-directed portfolio services, managed accounts, managed funds, self-managed superannuation funds administration and non-custodial administration and reporting services.
Netwealth share sale
It was announced yesterday that there had been a major share sale by executives of the ASX 200 tech share.
Michael Heine is an executive director of Netwealth, and the share transaction related to an indirect interest of the business. Michael Heine "controls" Heine Brothers Pty Ltd, which is the trustee for the MMH Trust.
Matthew Heine, the current CEO and managing director of the business and the son of Michael Heine, owns 25% of the shares of Heine Brothers Pty Ltd.
It was the entity Heine Brothers Pty Ltd as trustee for The MMH Trust which sold the 3.3 million shares.
This sale generated proceeds of $55.49 million, so it achieved an average sales price of $15.30 per share.
Is this worrying for the ASX 200 tech share?
Not many people would be able to sell over $55 million of shares and still have a sizeable stake in the business, but after the sale the Heine entity we're talking about still owned 103.6 million Netwealth shares, which is worth over $1.6 billion.
There are other entities that the two directors are involved in that also own Netwealth shares, including Leslie Max Heine Pty Ltd as trustee for The LMH Trust, which owns 14.5 million shares, which has a value of around $230 million.
In other words, the Heine family are still extremely invested in the business.
FY23 was another strong year of growth for the business – total income rose 21.6% to $214.7 million, while statutory net profit after tax (NPAT) went up 20.9% to $67.2 million.
The company isn't sitting back. It said that in addition to ongoing investment in the platform functionality, Netwealth has also continued to invest in platform infrastructure, scalability and cybersecurity.
Netwealth share price snapshot
Since the start of 2023, the Netwealth share price has gone up by 30%. It has significantly outperformed the ASX 200, which is only up 3% for the year.
