The Magellan Financial Group Ltd (ASX: MFG) share price sank deep into the red in early trade before recovering.
At the time of writing, the fund managerâs shares are flat at $9.63.
Whatâs going on with the Magellan share price?
Investors were hitting the sell button again at the open after Magellan announced that its co-founder, Hamish Douglass, had made a major share sale.
According to the release, Douglass informed Magellan that an entity associated with his family has sold approximately 13 million ordinary shares.
This was undertaken yesterday evening via an after-market block trade at a price of $9.10 per share. This represents a 5.5% decline to the Magellan share price at yesterdayâs close and values the parcel of shares at approximately $118.3 million.
The release also highlights that the Douglass family entity has entered into an undertaking with a Barrenjoey Group entity that undertook the block trade, not to sell any additional shares in Magellan for 12 months.
Based on recent disclosures, this sale will have taken Douglassâ holding from 21.45 million shares to approximately 8.45 million shares.
Why did Douglass sell $118 million worth of shares?
The release notes that Douglass has further advised that the reason for the share sale was for family diversification purposes. He explained:
I have full confidence in the Magellan investment team including the global equities team led by Nikki and Arvid. Consistent with my confidence in the team I have not sold any of our investments in any Magellan funds.
Itâs a shame he didnât sell those shares earlier. At the start of 2022, the Magellan share price was fetching $19.00. This means that those 13 million shares would have had a market value of almost $250 million at that point.
The post Magellan share price flat after Douglass sells $118m of shares appeared first on The Motley Fool Australia.
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More reading
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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