ChaChaCha!
February 21, 2022·10 comments·Money
The founder and board chair of a publicly traded space company sold his entire stake for $255 million while the company issued bullish public statements and Wall Street analysts promoted the stock. The transaction sequence was perfectly legal, meticulously documented in SEC filings, and largely unnoticed. It reveals a system where sophisticated insiders can exit completely while everyone else is still buying in.
• The exit was methodical and profitable. Between December 2020 and September 2021, the insider sold 10+ million shares at escalating prices, netting $255 million while still holding the board chair title.
• The timing matters. Shares sold at $24-37 in early 2021 when analyst sentiment was most bullish. The company's public statements during this period continued to emphasize growth and opportunity.
• Wall Street amplified the opportunity narrative. Dozens of analyst reports from 2021 promoted the stock using language like "could really take off" while the person closest to company operations was systematically cashing out.
• SEC rules made this invisible. Warrant exercises, transfers through investment vehicles, gifts to trusts, and other mechanisms obscured the true scope of insider selling. Bloomberg's automated filing readers missed the full picture.
• The regulatory response was silence. Enforcement attention focused elsewhere while a textbook liquidation proceeded through public documents. What's the difference between this and older names for this behavior.
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Comments
Ben, never considered this, but how do direct option purchases other than grants show up for Insiders? I was just thinking, as many SEC filings as I’ve read, can’t remember seeing a Form 4 with regard to direct option purchases.
I would wager that cha-cha-cha played the Delta game with more than 50% of all MEME stocks, with out-of-the-money call options. He announced it regarding GME, tweeted it out on several others 1Q 2021.
Keep exercising those financial analyst skills! Ben has asked on the Forum what are the most powerful ways to tell the stories that need telling. Seeing posts like this, that just state the facts, rank way up there for impact. Not every bit of skullduggery is as cut and dried and has the facts at hand to point out for those with the skill to do it. Glad to have Ben’s keen eye looking out for the Pack.
That’s a great question, Carl. My sense is that when options are used in this manner (cough, cough, Elon), it’s through cut-outs like a friendly HF.
Good reporting. Thank you. Nothing to see here, move on. Much like…
Does SPCE ever become a buy henceforth?
I was early money on the MRNA insider selling. For a while it was as smart and as productive as pissing into the wind. Nobody cared. Moar jabs. NGU. Now that it’s come down to earth people have started to notice.
I’d have to look at their cash position before I’d even hazard a guess. Looks like they’re totally focused on the “near space tourism opportunity”, and that strikes me as a long slog under the best of circumstances.
How many $400,000 tickets can you really sell? At least SpaceX is focused on commodity space freighting, not hauling the sons of oligarchs and lottery winners to the Karman line.
Looks like someone was paying attention or read your note.
I should have read this thread before getting involved with Cha Cha Cha! After watching ChaCha on CNBC, I thought this guy was a genius, and bought IPOC which turned into Clover Health. Then I realized I had been had so I converted my IPOC to OpenDoor, another ChaCha SPAC. Now, I’m going to ride these 'investments down to the ground" just like my first investment: Coleco. No pain, no gain!
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