Audinate chief sold shares before capital raise

Listed AV networking business Audinate is on a tear, and chief executive and co-founder Aidan Williams is cashing out.

He sold 51,702 shares, or 2.6 per cent of his $26 million holding, on August 28, securing $706,249.32 at $13.55 a pop. This cash, he told us, would meet “upcoming tax obligations”.

The most intriguing aspect of Williams’ sale, however, is its timing. It was disclosed on September 6 (two days late in what the company said was an “administrative oversight”). This was the day before Audinate announced a $50 million, fully underwritten capital raise at $13 a share.

As you’d expect, this has suppressed Audinate’s share price, which fell 9.7 per cent on the day the raise was announced and hasn’t reached its pre-capital-raise level since. By selling nine trading days before (rather than after) the capital raise, Williams has, at the margin, maximised his reward, to the tune of nearly $20,000 at Thursday’s $13.20 closing price.

Knowledge of an upcoming capital raise could be considered material non-public information. Williams said he was given permission to trade in accordance with company policy, and that the capital raise was decided upon by the board sometime after his trade.