Lululemon chairman sold stock before CEO's surprise departure
(Reuters) - Yogawear maker Lululemon Athletica Inc's LLL.TO (LULU.O) Chairman Dennis "Chip" Wilson sold stock worth $50 million days before shares slumped on the news of Chief Executive Christine Day's surprise departure.
Wilson, who founded the company in 1998 and remains its largest voting shareholder, set up the sales plan in December, the Wall Street Journal reported citing InsiderScore.com, which tracks insider trading and institutional ownership.
Wilson sold 607,545 shares at $81.50 each on Friday, earning $49.5 million, according to a regulatory filing. (link.reuters.com/zux78t)
The SEC allows company executives to trade their own stock by using a preset plan known as 10b5-1, even when they have access to private information.
Lululemon shares slumped as much as 15 percent in extended trading on Monday after Day announced her departure plans. The shares dropped about 17 percent on Tuesday amid price target cuts and downgrades by Wall Street analysts.
The maker of high-end, fashionable workout wear had to recall its excessively see-through yoga pants in March, which proved a huge blow.
(Reporting by Garima Goel in Bangalore; Editing by Stephen Coates)