Marketo: 5 Different Insiders Have Sold Shares During The Last 30 Days

Dec.19.13 | About: Marketo (MKTO)

In this article, I will feature one tech stock that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:

  1. The stock was sold by three or more insiders within one month.
  2. The stock was not purchased by any insiders in the month of intensive selling.
  3. At least two sellers decreased their holdings by more than 10%.

Marketo (NASDAQ:MKTO) provides cloud-based marketing software platform that enables organizations to engage in modern relationship marketing in the United States.

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Insider selling during the last 30 days

Here is a table of Marketo's insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Sold Rule 10b5-1 Current Ownership Decrease In Ownership
Sanjay Dholakia SVP Dec 12 13,000 Yes 48,119 shares 21.3%
Frederick Ball CFO Dec 12 10,000 Yes 20,000 shares 33.3%
William Binch SVP Dec 12 65,000 Yes 0 shares + 83,921 options 43.6%
Jason Holmes SVP Dec 12 15,000 Yes

50,000 shares + 142,500 options

Phillip Fernandez CEO Nov 25-26 10,000 Yes 536,514 shares 1.8%
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There have been 113,000 shares sold by insiders during the last 30 days. More details about the Rule 10b5-1 trading plan can be found from this link.

Insider selling by calendar month

Here is a table of Marketo's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
December 2013 103,000 0
November 2013 10,000 0
October 2013 0 0
September 2013 5,271,240 0
August 2013 0 0
July 2013 0 0
June 2013 0 0
May 2013 126,300 0
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There have been 5,510,540 shares sold and there have been zero shares purchased by insiders since May 2013. Marketo had its IPO on May 17, 2013 at a price of $13.00 per share.


Marketo reported the third-quarter financial results on October 24 with the following highlights:

Revenue $25.5 million
Net loss $10.0 million
Cash $140.9 million
Debt $7.8 million
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Marketo's guidance is as follows:

Q4/2013 FY/2013
Revenue $26.2-$26.7 million $93.9-$94.4 million
GAAP net loss $0.32-$0.34 per share $1.77-$1.81 per share
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Marketo's competitors include Responsys (NASDAQ:MKTG). Here is a table comparing these two companies.

Company MKTO MKTG Industry Average (Application Software)
Market Cap: 1.22B 995.54M 919.66M
Employees: 339 1,084 798.00
Qtrly Rev Growth (yoy): 0.65 0.28 0.31
Revenue: 84.59M 194.33M 158.87M
Gross Margin: 0.58 0.53 0.71
EBITDA: -36.16M 13.34M 5.26M
Operating Margin: -0.47 0.01 -0.00
Net Income: -39.90M 787.00K N/A
EPS: -2.52 0.02 N/A
P/E: N/A 1,217.50 27.22
PEG (5 yr expected): -0.80 5.51 0.98
P/S: 14.24 5.13 4.49
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Marketo is trading at a higher P/S ratio than Responsys. Responsys has also seen intensive insider selling during the last 30 days.


There have been five different insiders selling Marketo and there have not been any insiders buying Marketo during the last 30 days. Three of these five insiders decreased their holdings by more than 10%. Marketo has an insider ownership of 0.40%.

Before entering short Marketo, I would like to get a bearish confirmation from the Point and Figure chart. The three main reasons for the proposed short entry are relatively high P/S ratio, negative earnings, and the intensive insider-selling activity.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.