Lululemon Chairman Sold $50 Million In Stock Right Before The CEO’s Surprise Departure
Wilson, the founder of the struggling yogawear company, set up the sales plan in December, which called for him to sell up to 5.7 million shares over an 18-month period, according to the Wall Street Journal.
He sold 607,545 shares at $81.50 on Friday (the day the board learned of Day’s departure), cashing in $49.5 million.
Lululemon Chairman Sold Stock Before CEO’s Departure
Lululemon shares slumped as much as 15 percent in extended trading on Monday after Day announced her departure plans. The shares dropped about 17 percent on Tuesday amid price target cuts and downgrades by Wall Street analysts.
Stunner: Lululemon CEO Christine Day leaving
Day came to Lululemon in 2008 and became CEO that year. She had been an executive for 20 years with Starbucks before joining the apparel retailer.
Investors appeared to disagree that the timing was right, with shares diving more than 12% by early evening — down $10.37 from Monday’s close — in after-hours trading on the news that came after markets closed.
Timing of Stock Sales Favors Lululemon Insider
After the market closed Jan. 14, Lululemon updated its outlook for the holiday quarter. Its revenue and earnings-per-share forecasts were higher than the company’s previous estimates, but Wall Street had been expecting even higher sales.
The company’s stock fell 3.9% the following day to $69.47. Mr. Wilson had sold his shares at an average price of $70.92.