Typically, when company insiders are selling stock, they know something…
This 100% seems to be the case over at Terra Tech (TRTC) and the market seems to have recognized this.
Over the last month, the senior management team at Terra Tech have dumped millions-on-millions stock and yesterday’s disclosure helps explain why.
Yesterday, Terra Tech filed an 8-K after the shareholders approved an amendment to implement one or more reverse stock splits at an aggregate ratio of not less than 1-for-5 and not more than 1-for-50.
The Board of Directors have full discretion to conduct these splits at any time or from time-to-time prior to September 25, 2018.
Terra Tech Directors Join the Insider Selling Party
Last week, we published an article that discussed some of the heavy insider selling taking place at Terra Tech.
Over the last two weeks, CEO Derek Peterson sold more than 3 million shares while CFO Michael James dumped 700,000 shares.
It looks like some of the other directions wanted to join in on this party and earlier this week, more members of management disclosed insider sales. Some of the transactions to highlight include:
- COO Ken VandeVrede sold 400,000 shares last week and still owns more than 9.3 million shares. We expect to see more selling in near future.
- Director Steven Ross dumped 200,000 shares last week and we expect to see him sell off his remaining 1.8 million shares.
A Downward Spiral
Over the last few years, we have been cautious with Terra Tech and think that the company has too much on its plate. Terra Tech was one of the first publicly traded cannabis companies and has a significant following.
After Terra Tech reported its second quarter financial results in August, CEO Derek Peterson said that he expects the company to generate between $38 million and $40 million in revenue in 2017. For this reason, we find the reverse split and recent sales to be major red flags.
When a company like Terra Tech (which is supposed to be in the middle of a major turnaround) reports such large sales by its CEO and CFO, it raises significant doubt about the company’s future.
Terra Tech has a long history of not acting in shareholders’ best interests and we plan to proceed with caution.