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Ford Chairman Offloads One Million Shares

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The question now is, "Why?"

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On Friday, news emerged that William Ford Jr. sold 1 million shares of Ford (F) stock. For those unaware, Mr. Ford is the auto manufacturer's chairman.

According to Bloomberg: "Ford sold the shares, at an average price of $5.05, to retire debt incurred in exercising options." The sale represents 16% of his total common shares.

Ford obviously holds a high-profile position at the company, and must know that the investment community may be reviewing the trade data. And since he's a Ford -- ol' Henry's great grandson -- this company is in his blood. I just can't imagine him bailing on that many shares.

The stock is trading not too far off its 52-week low, so this sure seems like a weird time to unload.

And Ford must have lots of money, or at least access to money. In other words, how can he not have some other source of dough to pay off that debt? Of course, I've never seen his bank account.

For what it's worth, news reports reveal that Ford turned down a traditional salary when he served as the company's CEO, taking options as compensation instead. That suggests to me that he's probably not struggling.

If I were in his shoes, I might have found some other way to raise capital. A quick gander at other recent insider activity reveals that Mr. Ford isn't alone. David Leitch, a VP, unloaded 16,000 shares the day before. Why?

Hold the phone, Ford bulls. I should make your case as well, in the interests of fairness. Mei Wei Cheng, also a VP, bought 50,000 shares in August. And Mr. Ford still seems to have a big interest in seeing the company succeed: He still directly holds 4,956,971 common shares.

Stay tuned…

On Friday, Ford closed at $5.29, up $0.01, or 0.19%.


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No positions in stocks mentioned.

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