Guess which ASX 200 company co-founder just offloaded $112 million in shares

We've just seen a co-founder sell out of most of his shares in a major ASX 200 company.

| More on:
Sell buy and hold on a digital screen with a man pointing at the sell square.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's always big news when a director, CEO or insider of an ASX 200 company sells out of a significant portion of their own shares. But when a co-founder unloads $122 million worth of shares? Well, that's certainly worth talking about.

That's the situation confronting Magellan Financial Group Ltd (ASX: MFG) investors right now.

According to ASX filings, Magellan co-founder Chris Mackay has just sold 12 million ordinary Magellan shares for a sale price of $9.40 per share. That translates into a sale worth $112.8 million, which occurred on 23 August.

The shares were held by Mackay's company, Magellan Equities Pty Limited, in which both he and members of the Mackay family have an interest. This parcel represents the vast majority of Mackay's interest in Magellan, the ASX 200 company he co-founded. He owned around 15.3 million shares before this sale, so presumably, he still retains approximately 3.3 million shares.

Who is Chris Mackay, and why is he selling out of his ASX 200 company?

Mackay, along with former Magellan boss Hamish Douglass, founded Magellan back in 2006. He has not had an active role in the ASX 200 company for many years now. That's aside from a brief stint last year when Mackay stepped in as chief investment officer following the resignation of Douglass.

Since 2012, Mackay has concentrated on his rule as chief investment officer at MFF Capital Ltd (ASX: MFF), the old Magellan Flagship Fund that is now run at arm's length as a separate listed investment company (LIC).

What's interesting about this sale from Mackay is its timing. The Magellan share price has been sliding for years now.

Created with Highcharts 11.4.3Magellan Financial Group PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

Magellan stock last peaked back in early 2020, topping out at over $65 a share. A series of issues since then, including the messy departure of Douglass, weak investment performance, and a massive loss of funds under management (FUM), have caused massive damage to the Magellan share price.

As has major sales from Douglass' own portfolio.

Today, Magellan shares remain down by 28.5% over the past 12 months and down more than 85% from its all-time highs.

But the Magellan share price has also bounced meaningfully in recent months. Since hitting a new multi-year low of $7.52 earlier this year, Magellan has rallied considerably, up more than 23% from that low. So perhaps this rally is why Mackay has just decided to sell out of this significant stake. He has given investors no explanation for this massive sale.

This news is probably not what Magellan's investors wanted to hear today.

Motley Fool contributor Sebastian Bowen has positions in Mff Capital Investments. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Financial Shares

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Financial Shares

Forget CBA, Macquarie is tipping a 40% return for this ASX financial stock

Let's see why this stock could be a better buy than Australia's largest bank.

Read more »

A group of stockbrokers sit in a room with several computer screens in front of them as they discuss the Zip share price and Zip's merger with Sezzle
Financial Shares

Up nearly 60% in a year, can Netwealth shares go higher?

Netwealth shares are up more than 200% over the past 5 years.

Read more »

Man smiling at a laptop because of a rising share price.
Financial Shares

Macquarie places 'outperform' rating on this ASX All Ords financial services stock

This financial services stock seems to be going from strength to strength.

Read more »

Woman and man calculating a dividend yield.
Financial Shares

Australian insurance sector: Does Macquarie prefer IAG or Suncorp shares?

Here’s an expert’s views on the insurance sector.

Read more »

A woman sits on a chair smiling as she shops online.
Financial Shares

Which ASX 200 financial share delivered better returns in FY25: IAG, AMP, or Zip?

We compare share price movements and dividend payments for these 3 ASX 200 financial stocks.

Read more »

a man sits in unhappy contemplation staring at his computer on his desk in a home environment, propping his chin on his hand.
Financial Shares

Did Suncorp or QBE insurance shares perform better in the last year?

These insurance providers brought solid returns for investors in the last 12 months. 

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Financial Shares

Up 58% since April, this ASX 200 financial stock just reported record results

The ASX 200 wealth management and technology company has been on a tear since April. Here’s the latest.

Read more »

A young woman smiles as she rides a zip line high above the trees.
Financial Shares

5 best ASX 200 financial shares of FY25 (CBA didn't make the cut!)

These stocks were well and truly 'in the black' for share price growth last financial year.

Read more »