Only two months since GW’s stocks slid on the previous CEO Kirby’s sell-off, current CEO Roundtree sold roughly half his stock to fund a house purchase.
Investors may be scratching their heads as the Games Workshop’s current CEO, Richard Roundtree, just sold off a chunk of his stock to the tune of about £500,000. This comes only two month’s after Tom Kirby (GW’s ex-CEO) sold nearly 20m in stock causing a slide that hasn’t relented as of yet.
That being said GW is still up considerably overall since Roundtree’s tenure as CEO and to be honest depending on who you ask, his sell-off may not be that much out of the ordinary.
Let’s take a look at Games Workshop’s 2018 snapshot:
GW’s Sales have been Growing
In the past year, the market has seen an unprecedented amount of success in Games Workshop’s sales. They’ve been so successful that they even gave a £5 million bonus spread across every job under the company.
However, Richard Roundtree, Games Workshop’s current CEO cautioned back in July it would be foolish to expect this steady rise in growth for long.
“…It would be unrealistic, if not daft, of me to promise that we can continue to grow at the rates we have reported over the last two years. I am not, however, planning to scale down our ambitions, I am just informing you of the back drop.”
After seeing a steady sales increase in the company for the past year, Richard Roundtree warned people of a potential slowdown to come in the near future.
Tom Kirby Sells a chunk of his GW Shares
As we’ve said before, Tom Kirby is the ex-CEO of Games Workshop, yet still holds a hefty amount of shares in the company. He recently sold off about 1.7% of his share equating to £20 million, after the market showed a steady increase value since Roundtree assumed the reins as CEO.
The stake represents 1.7% of Games Workshop, although Kirby still owns 4.8% of the business and is subject to a 180 day lock-up on the remaining shares.
Tom Kirby’s disposal may have caused the shares to fall by nearly 5% to £37.67 after a spectacular run…
Nealy 20 days later the slide has continued, and yesterday Games Workshop themselves issued an ominious warning:
Starting back in 2016, you can see a steady trend of an increase in sales and profit. As the chart moves well into 2018, you can see a significant drop almost overnight (even though it was about 20 days in the making).
Currently here in November, the charts are looking like this:
With the high point being where Kirby sold off his stock, as seen better below in the 1 year look:
(Note these charts are in USD, Games Workshop is traded in GBP on the London Stock Exchange)
GW’s CEO Roundtree Sells Off Stock To Buy a House
Now current CEO Richard Roundtree has sold off nearly half his stock to fund the purchase of a house.
According to the filing, Roundtree still retains about 15,000 shares which is about .04 share capital of the company, unlike Kirby who still owns about 4.8%
The current value of the sale is about £500,000.
Now somethings to consider:
- Before the filing, it appears Roundtree only owned less than 1% share capital of GW, which makes sense giving his relatively short tenure compared to Kirby who has been in leadership since the early ’90s
- The “5 pence each” means that they were probably his stock options.
Additionally according to an industry professional familiar with the hobby when asked his thoughts on the matter:
Remember with all the current brexit silliness it’s not a bad idea to have a house rather than stock in a UK company who’s success depends on luxury goods purchases from overseas
Also possibly getting tax advantages by buying before the end of the year.
The rule of thumb for high level executive share purchases and sells is that “people sell for all sorts of reasons – finance a purchase, diversification, etc”. They only buy for one reason – because the company is doing well.
The question is, what’s next for the future of Games Workshop? Will stock value go up as more people jump on board of what was just sold? Or will it continue to drop despite new releases and efforts to the company, and of course the looming Brexit?
If the latter happens, the bigger question may be what will GW stop supporting hobby-wise to help keep costs under control going into 2019?
Let us know in the comments of our Facebook Hobby Group.
About the Author: Rob Baer
