A pair of Wynn Resorts (NASDAQ:WYNN) executives took advantage of a big pop in the stock earlier this week to reduce exposure to their employer’s shares.
On Monday, gaming equities, with Wynn acting as one of the leaders, vaulted higher. That’s after Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) delivered an encouraging Phase 3 trial update on BNT162b2, the companies’ COVID-19 vaccine.
The treatment showed a 90 percent efficacy rate with minimal side effects in the late-stage trial. That sparked hopes that when it becomes widely available, those that take the vaccine will resume normal travel habits and return to the Las Vegas Strip for business and leisure.
President and CFO Craig Billings and General Counsel Ellen Whittemore capitalized on the rally, with each trimming their stakes on Nov. 9, as Wynn stock traded above $100 for the first time since June.
Billings sold 7,583 shares at an average price of $100 in a transaction valued at $758,300, while Whittemeore unloaded 1,970 shares, also at an average price of $100, for $197,000, according to Guru Focus data.
Those sales were well-timed because, prior to a Friday rebound, Wynn stock sank 13.33 percent after the executives trimmed their positions.
It’s not unusual for high-ranking executives and board members to sell their employer’s equity. In most cases, it’s not seen as a negative. Insiders can and do part with company stock to raise cash and diversify their personal portfolios, among other reasons.
In the cases of Billings and Whittemore, there’s nothing nefarious about their sales. They simply benefited from good timing. This doesn’t qualify as the illegal type of insider trading, because the good news on the Pfizer/BioNTech vaccine was widely published and readily available to the investing public.
In fact, Pfizer CEO Albert Bourla sold $5.6 million worth of his holdings on Monday, with some other executives at the pharmaceuticals giant reducing their stakes as well. Those moves drew scrutiny in the media. But from a legal perspective, everything is kosher and there’s nothing to see here.
In August, the gaming company announced the issuance of 176,247 shares to keep 240 key employees on board during the challenging coronavirus climate. CEO Matt Maddox, Billings, and Whittemore were among the recipients of equity under that program.
At the height of the first wave of the pandemic in March, Wynn revealed that Maddox agreed to forego cash salary for the remainder of 2020. Instead, he moved his compensation for the rest of the year to 100 percent equity. A statement issued by the company at the time revealed other executives and board directors took salary reductions ranging from 33 percent to 100 percent in exchange for stock. But they weren’t identified.
This year, Wynn insiders aren’t frequent sellers of the stock. Prior to the Nov. 9 sales by Billings and Whittemore, the only previous disposals of shares by high-ranking officials at the company were an August sale of just 400 shares by director Patricia Mulroy and Whittemore selling 2,453 shares in the same month.