The S&P/ASX 200 Index (ASX: XJO) mining stock Champion Iron Ltd (ASX: CIA) has just seen one of its directors sell an enormous amount of shares.
It wasn't just any director, it was the company's executive chair Michael O'Keeffe who enacted this major sale.
What happened?
O'Keeffe owns a number of direct and indirect interests in the ASX 200 iron ore stock.
His entity, Eastbourne DP Pty Ltd, held 1.5 million Champion Irion shares before this transaction and that business sold its entire holding for $7.60 per share. The total sale was $11.4 million.
It can be a worrying sign when leadership figures decide to sell. Typically, it can mean they think the valuation has gone too high or perhaps there's some bad news on the way.
The iron ore price has done incredibly well in recent weeks – it has risen to almost US$140 per tonne after being close to US$100 per tonne just six months ago.
Investors have sent Champion Iron shares up around 25% since 24 October, as we can see on the chart below.
Should investors worry about Champion Iron shares?
The Champion Iron executive chair can't control when the iron ore price goes up or down, which I think is the biggest influence on the share price of ASX iron ore shares.
O'Keeffe is still a major shareholder of the ASX 200 mining stock – he directly owns 6.75 million Champion Iron shares which has a value of $52 million. His main entity, called Prospect AG Trading, owns 34.36 million shares, which has a value of $264.6 million.
The executive chair is still heavily invested in the business and highly aligned with regular shareholders. Investors can see he's still involved significantly in the business.
Champion Iron can grow its iron production in the future, which can help the underlying value of the business, though it can't control what happens with the iron ore price.
