Last Friday, I was browsing messages of the private chat of Value Investor's Edge by J Mintzmyer and found one message that caught my interest.
A user inquired about insider selling of Nordic American Tankers Ltd. (NYSE:NAT) shares by an entity called High Seas AS.
High Seas AS is the entity owned by the family of Herb Hansson, CEO of NAT. Mr. Hansson does not own NAT stock directly. His personal ownership of the company is entirely through High Seas AS.
It caught my interest and I decided to investigate this matter further. In my opinion, I have gathered some very interesting information, which could be helpful to all investors interested in NAT.
I have not found any filings on SEC, which would confirm selling, but I discovered, that according to 20-F forms of NAT for 2015 and 2014, the number of shares which High Seas AS owned decreased from 3,870,695 shares on 03/27/2015 to 3,370,695 shares on 03/23/2016.
It was apparently an insider transaction which should have been reported, however, there were no disclosures. I became even more interested and continued to investigate.
I tried to find the source of information that a user reported and I found it. For example, it can be seen in the headlines of Ycharts. On 06/09/2016, MT Newswires reported:
Shareholder High Seas AS Files To Sell $3.0M of NAT on 5/31/16
June 09, 2016 22:13
Shareholder High Seas AS of Nordic American Tankers Ltd. (NAT) filed a Form 144 on 5/31/2016 with the S.E.C reporting the following changes in ownership:
Transaction Date Transaction Type Share Amount Price per Share Value
---------------- ------------------------------------ ------------- --------------- ------------
5/31/2016 Intent to Sell 200,000 $15.12 $3.0M
The Form 144 is filed with the Securities and Exchange Commission to reflect the information of any holder of restricted stock to sell those shares. After the 144 is mailed to the S.E.C, the filer is permitted to sell the shares, or any fraction of them, within 90 days.
Founded in 1970, The Washington Service provides securities professionals with financial, economic and public policy research and data. For more information about our Insider Trading products, please visit Washington Service or contact us at (301) 913-5100.
On 3/22/2016, there was a similar newswire regarding a Form 144 from High Seas AS with intention to sell 400,000 shares at $14.28 per share. The date of filing was 3/15/2016.
I tried to check this information at the SEC and found nothing. As can be seen from the newswire, the source of information is The Washington Service, a reputable financial data company. I contacted them, to determine the reason for discrepancy between their data and the SEC Here is their response, along with my request:
Thank you for your question, I hope that my explanation helps clear up the confusion.
SEC Form 144s are paper filings. A very small percentage of those who file 144s submit them online. As such, the SEC does not make available online any of the paper submissions. These two 144s were both submitted on paper, and that is why you were unable to find them on www.sec.gov. We have copies of the paper filings, and make them available in PDF to our subscribers.
Additionally, Form 144s disclose the insider's intent to sell shares that are otherwise restricted, not the sale itself. So, though a 144 was filed does not guarantee that they will actually sell the shares. They have 3 months from the date they file the 144 to sell, otherwise they must file another 144 with the SEC.
Please let me know if you have any other questions.
Erin Oxnard The Washington Service 7101 Wisconsin Avenue, Suite 1111 Bethesda, Maryland 20814-4837 Direct: (301) 913-5133 Main: (301) 913-5100 Fax: (301) 913-5101 www.washingtonservice.com
On 6/17/2016 3:50 PM, Stanislav Oleynikov wrote:
I am a financial blogger that is following the company, called Nordic American Tankers . You can read my article devoted to this company here:
I have noticed on the website ycharts.com two reports stating that High Seas AS has filed Form 144 on 5/31/2016 indicating the intent to sell 200,000 shares of Nordic American Tankers and on 3/15/2016 with the intention to sell 400,000 shares of NAT. According to the website, these reports come from MT Newswires and are based on data from The Washington Service.
However, at sec.gov I have not been able to find any recent Forms 144 regarding NAT or High Seas AS.
High Seas AS is the company, controlled by Herb Hansson, CEO and President of NAT, who is widely known by very aggressive promotion of the stock and his personal ownership of shares of this company. He regularly appears on CNBC, promoting the company and his personal interest alongside with shareholders to support the market price of the company.
I have become interested in this discrepancy (between information that allegedly comes from your company and official information on sec.gov) and I have compared the number of shares of NAT, that High Seas AS owned in recent years, using 20-F forms. Based on these forms, High Seas AS has disposed of 500,000 shares from March of 2015 till March of 2016. However, there was not a single Form 144 at sec.gov from High Seas AS that would indicate its intention to sell shares of NAT. It looks strange.
I would be very grateful if you looked at this matter, to determine where is the mistake: in information that is allegedly attributed to your company or in sec.gov.
Based on this information, it is very likely that Herb Hansson, CEO of NAT sold a significant amount of shares in the open market. Form 144 is an intention to sell in the open market, not an actual sell. However, now it is known that the number of shares High Seas AS (Hansson family) owns decreased by 500,000 shares from 03/27/2015 till 3/23/2016 and that it filed SEC Form 144 for 400,000 shares on 3/15/2016 and for 200,000 on 5/31/2016.
The total amount of shares, which could have been sold, may be as high as 1,100,000 or 28% of the stake of Mr. Hansson, if 400,000 shares were sold after 3/23/2016.
I have contacted IR of NAT, but have not received a reply so far.
Disclosure: I am/we are short NAT.
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.