Cettire Ltd (ASX: CTT) shares are starting the week deep in the red.
In morning trade, the ASX e-commerce stock is down 7.5% to $4.46.
Why is this ASX stock sinking?
Investors have been heading to the exits on Monday after the company confirmed that its founder and CEO, Dean Mintz, has sold down his stake.
Insider selling rarely goes down well with the market. The theory goes that if the insiders believed their shares were undervalued, then they would be holding onto them.
What did Mintz sell?
According to the release, the ASX stock's founder and CEO agreed to sell down 27.5 million shares in the online luxury retailer. This represents a whopping ~7.2% of the company's issued capital.
The sell-down was undertaken at a price of $4.63 per share by way of an underwritten block trade, equating to a total consideration of approximately $127.3 million.
The sale price represents a modest 4.1% discount to where the Cettire share price last traded, which is quite a coup for the CEO given the size of the selling.
This could be a sign that demand for the ASX stock remains strong despite rising almost 200% over the last 12 months.
What's left?
The release reveals that following this sale, Mintz will retain a ~30% shareholding in the company and remain Cettire's largest shareholder.
As a result, it is fair to say that he still has plenty of skin in the game after this sale.
Commenting on the sell-down, Mintz said:
Cettire continues to perform very strongly as demonstrated in the Company's recent H1-FY24 Results.
In response to strong investor demand, undertaking this share sale provides enhanced liquidity and free float, improving the likelihood of achieving further major index inclusion over time.
In addition, the CEO has agreed to escrow his remaining holding in Cettire until the release of the company's full-year results in August.
