MARA Holdings (NASDAQ: MARA) has experienced a significant rise in insider selling activity in recent months.
According to recent filings with the U.S. Securities and Exchange Commission (SEC), several top executives have offloaded substantial portions of their holdings in the company.
One of the most notable transactions occurred on October 16, 2024, when Salman Khan, the company’s Chief Financial Officer (CFO), sold 16,700 shares of Marathon stock at $17.50 per share, amounting to $292,250.
Picks for you
This sale was executed under a Rule 10b5-1 trading plan, which Khan adopted on June 18, 2024. Despite the sale, Khan still retains 2,077,232 shares in the company.
The Rule 10b5-1 trading plan allows major shareholders, including corporate insiders, to sell a predetermined number of shares at scheduled intervals, a common practice to avoid concerns about trading on non-public information.
Similarly, Frederick G. Thiel, Marathon’s Chairman and CEO, sold 27,505 shares on the same day at $17.50 per share, generating $481,337.
This followed a transaction on September 20, 2024, where Thiel sold 27,512 shares at $15.70 per share, totaling $431,939. Over the past year, insiders have sold a total of 101,634 shares, with no recorded purchases, signaling a broader trend of selling activity among key executives.
While insider selling may raise concerns among investors, it’s essential to note that these transactions were conducted under pre-arranged trading plans.
Therefore, they do not necessarily indicate a lack of confidence in the company’s future but are often part of routine financial planning by executives.
MARA Holdings’ strategic growth amid insider selling
Despite recent insider sales, MARA remains a leading player in the Bitcoin (BTC) mining industry, positioning itself as one of the largest cryptocurrency miners globally.
Beyond Bitcoin, Marathon is diversifying its operations by entering the Kaspa (KAS) mining space and expanding into utility-scale mining, energy harvesting, and the technology sector.
In May 2024, the company entered into an agreement with the Ministry of Energy and Petroleum of the Republic of Kenya to support energy utilization and optimize renewable energy projects across the country. This partnership demonstrates its commitment to sustainability and diversification on a global scale.
The firm reported strong operational growth in September 2024, producing 705 Bitcoin, a 5% increase from August. Daily Bitcoin production rose to 23.5 BTC, an 8% month-over-month increase, with its share of miner rewards climbing to 5.2%.
Additionally, the Energized Hash Rate grew by 5%, reaching 36.9 EH/s. As of September 30, 2024, the company held 26,842 Bitcoin.
“We remain on track to reach our target of 50 EH/s by the end of 2024. Our team continues to quickly energize our owned sites and operate them more efficiently than originally planned”- Fred Thiel
Recently, the firm secured a $200 million line of credit backed by its Bitcoin holdings, boosting liquidity and positioning it for further expansion. It also announced plans to offer $250 million in convertible senior notes, signaling continued strategic growth.
Analyst outlook and stock performance
Analysts remain optimistic about the stock despite the uptick in insider selling. Cantor Fitzgerald initiated coverage with a ‘Buy’ rating and a price target of $21, representing a 12.24% upside.
Similarly, HC Wainwright & Co. reiterated a ‘Strong Buy’ rating with a $27 price target, indicating a 44.31% upside, pointing to the company’s strong growth potential.
The company’s financial performance is closely tied to the price of Bitcoin, which recently traded at around $67,058. Companies like MicroStrategy (NASDAQ: MSTR) and Coinbase (NASDAQ: COIN) have also benefited from the broader market rally, further strengthening their positions.
As of October 21, 2024, the stock price stood at $18.71, reflecting a 10% gain over the past week and a 21% increase over the past month.
With interest rates favoring risk assets like Bitcoin, the stock is expected to rise further in the coming months. Institutional interest is also growing, with 55.50% institutional ownership and notable increases in holdings by major firms.
With Bitcoin projected to rise as high as $160,000 by 2025, driven by factors such as increased institutional adoption and new Bitcoin ETFs, the company is well-positioned to benefit from the broader market.
While insider selling has attracted attention, strong operational growth, diversification strategies, and favorable market conditions suggest a positive outlook.
Investors should weigh insider activity against Marathon’s growth trajectory as they make their decisions.
