Key insights
- The author highlights concerns about Adobe's management, citing the CFO's share sale before a buyback announcement, the CEO's high compensation despite poor stock performance, and a lack of insider buying. The delayed CEO search and potential internal appointment are viewed negatively. The author suggests that only activist intervention could improve the company's trajectory, signaling bearish sentiment towards Adobe's future performance.
So I’ve read a lot of the Adbe posts in this sub, and I feel like most of them focus mainly on the front page numbers. I wanted to take a step back and focus more on analyzing the people who actually run and make decisions about the future of the company, hoping it helps us better understand what’s really going on.
I see some red flags. First, the CFO sold 331k shares one day before the buyback announcement. Then they announce another 25B buyback program. To me that basically translates to we don’t know where to invest the money so we’re just burning it(catching a falling knife), which is pretty much what happened with the current 25B program while the stock is down -30%YTD.
Also the CEO is making 51M in total comp. Are we rewarding failure here ? He only owns about 0.11% of the company and has basically appointed most of the board. None of them have been buying at current prices. Which I see as a very bearish signal. The stock is at one of its cheapest levels and there’s no insider buying at all ???
They also announced they were searching for a new CEO about 45 days ago, and there’s still no news. What’s your take on that ? Personally if it ends up being an internal appointment, I would seriously consider cutting a large portion of my exposure to this company.
At this point the only thing I think could really change the trajectory is an activist filing a 13D and stepping in to shake things up, because the current board feels way too conservative