Insights

Here’s why the Appen (ASX:APX) share price is falling 5% today

The company’s CEO has cashed out $1.4 million worth of shares. Here’s the lowdown.
The post Here’s why the Appen (ASX:APX) share price is falling 5% today appeared first on The Motley Fool Australia. –

Appen Ltd (ASX: APX) shares are falling this morning after the company’s chief executive officer sold a sizeable amount of his shareholding.

At the time of writing, the Appen share price is trading 4.9% lower at $12.42.

Why is the CEO selling?

According to the announcement by the artificial intelligence data provider, CEO Mark Brayan disposed of 109,430 shares last Friday. The sale was actioned at $13.0805 per share — an approximate total sale value of $1.43 million.

Whenever a CEO cashes out of the company they are leading, eyebrows are raised. So, why has Brayan sold down his holding?

The company’s release specifies the sale was to satisfy tax obligations arising from the vesting of 173,153 performance rights in March.

Post-sale, Brayan retains 482,032 shares in the company. On that basis, this recent sale would represent a selldown of roughly 18.5% of Mr Brayan’s holdings in Appen.

Poor timing for Appen share price

Usually, shareholders aren’t too bothered by management taking some pocket change for their efforts. However, cashing out after a period of share price underperformance is a surefire way to leave investors with a bitter taste.

The Appen share price has fallen approximately 70% from its high back in August last year. Disappointment has lingered since the company issued a guidance downgrade in December, following a sluggish quarter.

More recently the shares have rebounded somewhat after the company announced a business restructuring. The move to reposition Appen with four distinct business units — Global, Enterprise, China, and Government — seemed to restore some shareholder optimism.

However, today’s down move indicates shareholders may feel the restructure alone isn’t enough to warrant a $1.4 million payday for the CEO.

Looking ahead

Shareholders will be hoping Appen delivers on its full-year guidance, which was reaffirmed in May. Between US$83 million and US$90 million is expected in underlying earnings before interest, tax, depreciation, and amortisation (EBITDA).

Once a growth company starts missing forecasts, it can get ugly quickly. The Appen share price will be skating on thin ice if FY21’s result disappoints — especially after seeing the CEO reduce his own interests in the company.

The post Here’s why the Appen (ASX:APX) share price is falling 5% today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!