Tilray, Inc. (TLRY) executives have sold a good deal of their own stock to start 2019.
According to SEC filings, CEO Brendan Kennedy, CFO Mark Castaneda, and Chief Revenue Officer Edward Pastorius have sold over 357,000 shares since the expiration of the company's lock-up period on Jan. 15.
In fact, just about one week after the expiration of the lock-up period, Kennedy sold a cool $11.1 million worth of Tilray shares.
The sale is particularly puzzling given Privateer Holdings, a firm Kennedy started in 2011, committed to maintaining its nearly 77% ownership stake based on its long-term bullishness on the industry.
"Privateer Holdings strongly believes in Tilray's long-term global growth strategy and pioneering role in shaping the future of the legal cannabis industry. Given this, we do not have plans to register, sell or distribute the shares Privateer holds in Tilray during the first half of 2019," a company statement read in January.
While Privateer has held to that word, Castaneda, Kennedy, Pastorius, and Director Michael Auerbach have combined to net sell 312,000 shares of the company, something that has piqued the interest of speculators on the stock.
While that pales in comparison to the nearly 60 million that Privateer has pledged to hold onto at least until the end of June, it is peculiar to see Privateer's founder take the payoff so quickly.
The issue was one not shirked by CNBC's Sara Eisen upon the earnings release.
Eisen: Why have you been selling so much stock? Do you have any clarity on why you've pulled millions from the stock?
Kennedy: I'm a significant owner of stock in Tilray, both directly in Tilray and through [Privateer]. I believe in the long-term global opportunity. That's why I started the company and that's why I'm in this.
Wilfred Frost: Why have you been selling though?
Kennedy: It's a very small portion of my ownership, mostly to ensure some diversification and handle taxes.
Overall, the sale of a relatively small amount of shares is not a cause for alarm.
What becomes problematic is that once we approach the second half of the year, Tilray shares could come under serious pressure.
As many investors will recall, the stock fell nearly 18% on the day its IPO lock-up expired in January.
Given executives have shown they are not shy to sell shares to take profits early in 2019, it would not be surprising to see shareholders get spooked over the idea that Privateer could pull shares come mid-year as well.
For those looking to buy today, keep that timeline in mind.
