LoanDepot, Inc. (NYSE:LDI) Director and major shareholder Anthony Li Hsieh has sold a significant portion of his holdings in the company, according to a recent SEC filing. The transactions, which took place on September 12 and 13, 2024, involved the sale of LoanDepot shares for a total value exceeding $1.3 million.
On September 12, Hsieh sold 50,000 shares at an average price of $2.2628 per share, and another 537,488 shares at an average price of $2.2692 per share. The following day, he continued to divest, selling 2,000 shares at an average price of $2.555 and 8,141 shares at an average price of $2.574. The total value of these sales amounted to approximately $1,240,622, with individual transaction prices ranging from $2.2692 to $2.574.
Additionally, Hsieh conducted sales under a Rule 10b5-1 trading plan, a mechanism that allows company insiders to sell shares at predetermined times to avoid accusations of insider trading. The shares were sold in multiple transactions, with prices fluctuating within specific ranges. On September 12, the shares were sold for prices between $2.215 and $2.36, and on September 13, for prices between $2.34 and $2.68.
Following these transactions, Hsieh's indirectly held shares, managed through the JLSSAA Trust, for which he serves as trustee, have decreased significantly, although he still retains a substantial stake in the company.
Investors closely monitor insider sales as they can provide insights into an executive's perspective on the company's current valuation and future prospects. Hsieh's recent sales are notable not only for their size but also for their timing, as they were executed under a pre-arranged trading plan.
In other recent news, loanDepot, Inc. has made significant strides towards its Vision 2025. The company reported a positive adjusted EBITDA of $35 million and a 56% year-on-year reduction in its adjusted net loss to $16 million. In addition, loanDepot has appointed Nancy Smith as the new Regional Vice President for its Colorado and Wyoming branches, a move expected to leverage her extensive experience and local relationships to steer the company's growth in these markets.
The company has also expanded its home equity line of credit (HELOC) offerings with the introduction of the equityFREEDOM First-Lien HELOC designed for homeowners who fully own their homes. Furthermore, loanDepot reached a tentative agreement to settle class action litigation related to a cyber-attack, and successfully monetized $29 billion of mortgage servicing rights while completing a $120 million productivity program, reducing operating expenses by 6%.
These recent developments indicate the company's continued efforts to transform its origination business and drive purchase transactions, maintaining a strong liquidity position of $533 million in cash.
InvestingPro Insights
As LoanDepot, Inc. (NYSE:LDI) faces notable insider sales, real-time metrics and InvestingPro Tips can offer investors a clearer picture of the company's financial health and market sentiment. LoanDepot's market capitalization stands at $938.07 million, suggesting a moderate size within the market. However, the company's P/E ratio is currently negative at -4.7, indicating that the company is not generating a net profit based on its share price.
InvestingPro Tips highlight that LoanDepot is quickly burning through cash and that analysts have revised their earnings downwards for the upcoming period, which may raise concerns among investors regarding the company's future profitability. Moreover, LoanDepot has not been profitable over the last twelve months, and its stock price has experienced significant volatility, as noted by the 48.33% strong return over the last three months juxtaposed with a -24.15% YTD price total return. This level of price volatility is echoed by another InvestingPro Tip, which points out that the stock generally trades with high price volatility.
Investors should also consider that LoanDepot does not pay a dividend to shareholders, which may influence the investment decisions of those seeking regular income from their investments. For those interested in a deeper analysis, InvestingPro offers additional tips on LoanDepot, providing more comprehensive insights into the company's performance and potential. Visit https://www.investing.com/pro/LDI for more detailed information, including several additional InvestingPro Tips that can guide investment decisions.
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