Less than four years ago, the stock of Fossil Group (FOSL 9.75, -0.32), which is known mostly for its watches, was trading north of $125.00 per share. Today, it is trading below $10.00 per share as the hits for the company and its shareholders keep coming. The hit this morning is that a Form 4 SEC filing indicated company CEO Kosta Kartsotis sold more of his company's stock last week.
The specifics of the filing show he sold 460,281 shares on June 8 at a price of $10.7191 and an additional 60,000 shares on June 9 at a price of $10.6796. The sale of those shares followed the sale of 1,075,000 shares that were sold between May 25 and May 30 at prices ranging from $11.1979 to $11.8430.
It was understood previously that Mr. Kartsotis had pledged a sizable portion of his stock holdings as collateral, so the prevailing assumption today is that the recent sale of stock has been forced to compensate for the declining value of the collateral.
Whatever the case may be, investors are rarely comforted by reports of insider selling following a large decline in the stock price. It is at that point, frankly, where they would like to see insiders buying the stock to reflect their belief in the company's long-term earnings prospects.
That might be financially impractical for Mr. Kartsotis at this point. The latter point notwithstanding, investors recognize that the road ahead for Fossil is paved with a good deal of uncertainty as it faces heightened competition from Apple's (AAPL) smart watch and related competition in the wearables space from the likes of FitBit (FIT) and Garmin (GRMN).
It hasn't been lost on investors either that Fossil is running headlong into the challenges of declining mall traffic and increased online competition, realities borne out in its disheartening first quarter earnings report and outlook shared last month.
The reports of insider selling, then, represent one more negative for a company -- and a stock -- sorely in need of some positive news.