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Thursday, January 4, 2018

Another Energous Insider Sale - This time for up to $43 million

So it looks like Malcom Fairbairn of Ascend Capital just sold a chunk of Energous stock. He had put in $20 million in August 2016 for which he appears to have obtained 15.5% of the company.

SEC's EDGAR site data (summarized here) shows he sold 809,061 shares on the 27th December, and 1,162,300 on 4th January, down to 4.5% of stock - leaving just 29% of what the company had held only a couple of weeks ago.

Depending upon when he sold on the 4th, he may have received around $22 per share, while the stock sold on the 27th could have been anywhere from $17 to $22 per share. That gives $25,570,600 from the sale on the 4th, and between around $13.5 and $17.8 million on the 27th for somewhere between $39 and $43.4 million, leaving around $23 million of stock (at the 4th January's prices).

A number of directors, including Martin Cooper, received a stock grant at a cost of $0 - 26,929 shares and at 4th January prices that is as much as $600,000 each. Cooper (@MartyMobile) was mentioned in the FCC Chairman's questionable tweet about Energous Part 18 approval.

The most important thing to notice though is that Ascend Capital, one of the largest investor in Energous for the last 18 months, just sold >70% of their holding, just before, what we the company would like us to believe is a huge ramp up in the company's fortunes. For a company well placed to "take over the world", the insiders sure are keen to sell.

Update 13th Jan 2018: A poster on SeekingAlpha reminded me that once below 5% holdings there's no requirement for a stockholder to report a sale to the SEC. That 4.5% that remained of Ascend's original 15.5% could be gone. If it has been sold, at a price of $22, that's a further $22.8 million dollars.

2 comments:

  1. I would like to clarify a statement you've made. The advice you got from the poster on SeekingAlpha is wrong. In fact, anybody who files a 13D must continue to report any material changes to their positions even if those positions fall below 5%, until they have completely divested their position.

    See Question 104.05 https://www.sec.gov/divisions/corpfin/guidance/reg13d-interp.htm -

    "It is important to note that the security holder's obligation to amend the Schedule 13D to report material changes to the information previously reported will continue until it files a final amendment disclosing the date on which it ceased to be the beneficial owner of more than five percent of the class of securities pursuant to Item 5(e) of Schedule 13D. [Sep. 14, 2009]"

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    1. Thanks for that link, I'm always interested in hearing from people with expertise in these matters, I certainly am a lot more confident on the tech and FDA/FCC regulatory side than I am SEC rules!

      I'm re-reading that and doesn't that essentially say "If you drop below 5% ownership you still have to report changes until you send us a final amendment saying you're under 5%?" - that is you can't go from 15% to 4.99%, then from 4.99% immediately to zero without reporting both, but you could go from 15% to 4.99%, then report that in a final amendment, then go from 4.99% to 0% without reporting that second sale?

      Of course this also assumes that everyone involved with Energous at a significant level adheres to both the spirit and letter of the law...

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