Some SonoSite execs and directors, led by CEO Kevin Goodwin, cashed out big-time this week.
Goodwin unloaded 95,000 shares on Wednesday for "personal reasons," spokeswoman Anne Bugge said.
"Most of these ... he has held since formation of the company," she said. "This is really the first time he's had a major sale."
At prices as high as $41 a share, he pocketed more than $3.8 million.
The shares represented about one-third of Goodwin's holdings, including stock and stock options, she said, not two-thirds as some investors concluded based on regulatory filings.
That confusion sent the stock down $2.91 or 7.1 percent to close at $38.10 today. SonoSite, a top maker of hand-carried ultrasound devices, had been on a run since last spring, climbing from less than $24 a share to a high of $41.81 last Wednesday.
Cathay Financial analyst Eli Kammerman told The Associated Press the sell-off may have been an overreaction to insider sales.
"SonoSite has long been speculated to be an acquisition target, and some investors may be reacting to the CEO's stock sale as a sign that an acquisition isn't imminent," Kammerman said. "When ATL Ultrasound spun SonoSite off in 1998, there was a provision in the agreement that any company that bought SonoSite within five years would have to pay the parent company a fee. That provision expires in April, so investors may be reading into insider sales as a sign that the company won't be acquired."
Other inside sellers this week include Kirby Cramer, a director, CFO Michael Schuh and Russell Edison, senior vice president of U.S. sales.