Williams-Sonoma CEO sells stock to cover lost value
Reuters and others are reporting that Howard Lester, CEO of Williams-Sonoma Inc., recently sold 14% of his shares in the company to cover what’s known as a margin call. The information was revealed by Williams-Sonoma in a filing with the Securities and Exchange Commission.
When a company borrows from a brokerage house to buy stocks on credit using securities and the stock dips below a certain point, brokers who lent investors money through these margin loans can demand that investors sell part of the stock or deposit more money to cover the losses. This is a margin call.
The upscale home furnishings chain is one of several multichannel merchants that have watched its value drop significantly this year amidst a soft US economy and weak housing market. Shares of Williams-Sonoma have lost 53% of their value since the beginning of the year. Over the past month, the stock has lost 33%. Shares closed at $12.10 on Wednesday.
Lester sold approximately 1 million shares in all on Monday and Tuesday for an average of $12.63 and $13.17, respectively. Following the sale, he owned about 6% of the company’s shares.