Why Nvidia's Jensen Huang is selling $14 million in stock almost daily

Jensen Huang, the CEO of NVIDIA, has been selling a significant chunk of his company's stock, triggering speculation as to why he is selling instead of holding. According to recent financial disclosures, Huang has been selling approximately $14 million worth of NVIDIA shares on a near-daily basis for months this summer. This move has sparked a wave of speculation and concern among investors who are keen to understand the rationale behind such a substantial sell-off.
NVIDIA, known for its prowess in graphics processing units (GPUs) and artificial intelligence (AI) technologies, has seen its stock value soar in recent years, particularly with the surge in demand for AI and gaming solutions. Huang's decision to sell comes at a time when NVIDIA's market performance has been robust, with the company's shares often seen as a bellwether for the tech industry's health.
According to a Fortune report, investors want more intel on the business at the top, they want to see more transparent corporate governance, open succession planning, and a change in pay structure to motivate the next era of management.
Huang selling his shares under a Rule 10b5-1 agreement
Huang's sale of these shares has led to various theories among market analysts and shareholders. Some speculate that Huang might be diversifying his investment portfolio, a common practice among executives to mitigate risk.
The sale of the shares comes under a very specific plan -- a Rule 10b5-1 agreement -- that allows executives and employees to buy or sell stock in their own company without violating insider trading laws by using a predetermined schedule.
Nell Minow, vice chair of corporate governance specialists ValueEdge Advisors, who also owns shares in Nvidia said this does not look good on the part of the company. “What I want from an executive [is] to be very bullish on the stock. I want the executive to be thinking all the time: ‘Boy, this is really going to be worth a lot more soon’ and not, ‘Oof, I better sell some because I’m … experiencing the vertigo of having all my eggs in one basket."