Lululemon Chairman Sold Stock Before CEO Departure
Dennis "Chip" Wilson, Chairman of yogawear maker Lululemon Athletica Inc. sold stock worth roughly US$50 million days before the shares slumped on the news of the company's Chief Executive Office Christine Day's surprise exit.
Wilson established the company in 1998. He is also the largest voting shareholder of Lululemon. According to Wall Street Journal citing IndsiderScore.com as source, the sale of Wilson's share was set up in December.
In a regulatory filing data, Wilson sold 607,545 shares that were priced at US$81.50 per share on Friday. This earned him US$49.5 million.
The Securities and Exchange Commission allows firm executives to trade their own stock by using a present plan known as the 10b5-1. SEC allows the occurrence of such even when company executives have full access to private information.
After the announced departure plans of Christine Day, Lululemon shares fell to as much as 15% in the extended trading on Monday. On Tuesday, the shares slumped by 17% amid downgrades and price target cuts by analysts at Wall Street.