Credo's COO sold $20.6 million of stock in one day and moved 175,000 shares into family trusts
Credo's COO booked a $20.6 million sale and shifted 175,000 shares into family trusts the same day, two days after the CTO's family trust sold. The rebound now sitting on its 50-day line is a bet that December answers the margin slip that cut 43% off the stock.
Vincent Jiang · 3 min read
The sale ran on a plan set in April, months before the crash
Credo chief operating officer Yat Tung Lam sold 100,000 shares on 25 September at weighted averages of $205.38 to $207.70, about $20.6 million, under a Rule 10b5-1 trading plan he adopted on 15 April 1. He kept 2.3 million shares directly and 250,000 more with Zhan BVI 2.
The same day, another 175,000 shares left his name: 100,000 into The Lam GRAT 2026, a grantor retained annuity trust where he is co-trustee, and 75,000 to his spouse 2. The Form 4 reached EDGAR on 29 September 1. Lam sold two days after the Cheng Huang Family Trust, run by chief technology officer Cheng Chi Fung and his wife, sold 27,500 shares for $5.3 million at $190.03 to $195.68 on 23 September 3.
Retail is extremely bullish at the line the recovery depends on
The quarter beat, $1.20 in adjusted earnings against $1.17 expected 4, and the stock still cratered on 2 September as analysts split on the report 5. It ran from a 52-week high of $308.67 6 down to test $176, a 43% drawdown, then snapped back almost 20% in five sessions to about $211, right on the 50-day average near $210 4. Retail message volume jumped more than 680% in a day and Stocktwits sentiment flipped to extremely bullish 7. Wall Street holds 18 buy ratings, one hold and zero sells, with a $281.39 consensus target 8.
What broke was margin, not demand
Fiscal Q1 revenue was $479.0 million, up 114.7% year over year, while GAAP gross margin slipped to 64.5% from 68.2% a quarter earlier 64. Guidance calls for $525 to $535 million this quarter 56, and on 28 September management lifted its fiscal 2027 growth guide to 85% at the Goldman Sachs conference, holding to a $600 million optical revenue target 97.
A year of gross margin gains vanished in one quarter
Data
| GAAP gross margin | |
|---|---|
| Q1 '24 | 65.8 |
| Q2 '24 | 62.4 |
| Q3 '24 | 63.2 |
| Q4 '24 | 63.6 |
| Q1 '25 | 67.2 |
| Q2 '25 | 67.4 |
| Q3 '25 | 67.5 |
| Q4 '25 | 68.5 |
| Q1 '26 | 68.2 |
| Q2 '26 | 64.5 |
The paperwork is estate arithmetic, not a verdict
Both programs predate the margin miss: Lam's plan dates to 15 April, the trust's to 5 September 2025 13. A GRAT shifts future appreciation out of the taxable estate while the grantor keeps an annuity 2, and the CTO's trust still holds 5.69 million shares after selling 3. The steady officer selling was the story here on 26 September; the COO's filing extends the pattern. No filing says what either man expects for December. The paperwork shows machines converting strength into cash on schedule, not a verdict.
December prices the trade
The early-December Q2 print has to show margin holding while revenue compounds, with the largest customer at 33% of sales and three more customers above 10% each 10. At roughly 74 times trailing earnings 4, the buyers at $211 own a question and the sellers have already banked their answer.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
