Ed Lin

Three CEOs recently bought up the embattled shares of their respective companies.

Moderna, Akamai Technologies, and FMC are in disparate industries, but their shares all slumped in 2024. In a year that saw the S&P 500 surge 23%, the three shares slid 58%, 19%, and 23%, respectively. The new year hasn't brought any respite. Moderna stock has already dropped 14%, while Akamai shares are 8.5% lower, and shares of FMC are down 15%.

Companies have a few levers to pull to signal confidence in the future, and that shares are undervalued. One way is to raise earnings guidance, and hopefully investors will get the point. Another way is if the board of directors signs off on a large allocation of money to buy back stock. Or a combination of the two, as materially reducing the number of shares outstanding lifts earnings per share. But perhaps the easiest and quickest way to assure shareholders is through open-market stock purchases by prominent company insiders, and the strongest signal would come from the top executive.

Consider that Moderna stock soared 16% on March 5 on news of a large purchase of stock by CEO Stéphane Bancel. Shares have been weighed down by fading demand for Moderna's Covid-19 vaccine.

Bancel paid $5 million on March 3 for 160,314 shares of the vaccine maker, an average price of $31.22 each. He made the purchase through Boston Biotech Ventures, an investment vehicle he controls that now owns 9.2 million Moderna shares, according to a form Bancel filed with the Securities and Exchange Commission. He also owns 5.5 million Moderna shares in a personal account, and 6.6 million shares through OCHA, another investment vehicle.

Moderna didn't respond to a request to make Bancel available for comment. His purchase seems particularly bullish because this is Bancel's first open-market purchase of Moderna stock since he joined the company in October 2011. He had been selling stock until as recently as February 2024.

Akamai co-founder and CEO Tom Leighton paid $3 million on Feb. 27 for 37,670 shares, an average price of $79.58 each. He now owns 137,342 Akamai shares in his personal account, and owns another 108,358 shares through a foundation, and 2.3 million shares through a trust.

Leighton's stock buy followed a late-February drop in shares of the cloud-services firm after Akamai issued disappointing guidance.

"Akamai is in the midst of a multiyear transformation, and I am very excited about our future," Leighton wrote in an email in response to a request for comment. "I see tremendous greenfield for our security products, particularly our fastest-growing API security and Zero Trust security solutions. And customer traction with our Cloud Infrastructure Services is just starting to take off. As we discussed on our recent earnings call, we are forecasting 40%-45% growth in this segment this year, and rapid expansion of our compute services through the end of the decade. We have a differentiated cloud offering that enterprises want, and our addressable market is more than $100 billion. My belief in Akamai and our opportunity for revenue growth is strong."

Leighton last bought shares in May 2024 when he paid $2 million for 22,000 shares, an average price of $92.68.

FMC Chairman and CEO Pierre R. Brondeau paid $1.9 million on March 4 for 54,000 shares of the agricultural-sciences firm, an average price of $35.90 each. He now owns 298,439 FMC shares.

FMC shares tumbled in early February after the company provided an outlook that fell short of analyst expectations.

"My recent purchase of nearly $2 million in FMC shares reflects my personal confidence in our company's strategy and future," Brondeau wrote in an email in response to a request for comment. "The current share price presented what I view as a compelling opportunity to increase my personal investment in a company whose short-term and long-term prospects I firmly believe in."

Brondeau's purchase looks especially bullish because he hasn't bought shares on the open market in more than 15 years. In February 2010, he paid $1 million for 18,500 FMC shares, an average price of $53.71 each.

Inside Scoop is a regular Barron's feature covering stock transactions by corporate executives and board members -- so-called insiders -- as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.

Write to Ed Lin at ed.lin@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

March 09, 2025 04:00 ET (08:00 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.