Why in the Heck is Salesforce.com CFO Dumping Shares?

by Donald Harder

On November 18 we asked the question “Is Salesforce.com the Next Short Seller Victim?”

The price at that time was 12% or so higher than it is now; not a huge drop, but $CRM is certainly under selling pressure and if it takes out November lows just above $103, well, Betty bar the doors ’cause the raiders are a come’n.

$CRM at 52-Week Lows and CFO Graham Smith Dumps another $1.2 Million

As bad as the company chart is, we have to wonder how much worse it must be below the surface considering the CFO just dumped $1.2 million in shares while the price is trading at 52-week lows. Consider a couple of facts to put this sale into perspective.

The CFO has far more intimate knowledge of the company’s financial condition than the markets and since the company reports earnings by side-stepping GAAP, well, you do the math.

The CFO has dumped $20 million in shares this year alone and $30 million total over the past 4 years.

The CFO has never kept a share past his required holding period. Imagine that.

When, Not if $100 Breaks…

Rumors are already swirling that $CRM is going to miss when it reports its 4th quarter earnings and some analysts are valuing it at $40 a share. When, not if $100 breaks, it may have a long way to fall before it finds support.

In the interest of full disclosure, we are short shares of Salesforce.com at the time of publication.