The TPG Telecom Ltd (ASX: TPG) share price dropped 8.6% on Friday. There was a major insider share sale.
David Teoh sells TPG shares
TPG addressed media reports that founder and astute telco figure David Teoh was selling shares.
Mr Teoh, who is a substantial shareholder of the company, has entered into an agreement to sell around 53.1 million shares in a block trade, which is an amount equivalent to around 3% of the company’s issued share capital.
TPG noted that Mr Teoh and his associates entered into an escrow agreement in June 2020 under which they must not dispose of, subject to certain exceptions, more than 20% of their total shareholding in the company for a period of 24 months after the merger between TPG and Vodafone Australia.
What does this mean for TPG?
David Teoh hasn’t had an operational role in the business for a long time. In March 2021, it was announced that he was resigning as a director and chair of the board. Shane Teoh also resigned from the board.
At the time of his resignation, Mr Teoh had a number of positives to say about the business:
“TPG Telecom is now a full-service telecommunications provider and home to some of Australia’s most loved brands including Vodafone, TPG and iiNet. It owns and operates nationwide mobile and fixed networks, has over five million mobile customers and two million fixed broadband customers”.
“Following the merger last year, we have come together better and faster than expected. The newly merged company has performed well and has strong, clear strategic priorities to drive growth and long-term shareholder value. This is only the beginning for TPG Telecom.”
Summary thoughts on the TPG share price
However, it does also seem that Mr Teoh wants to sell down his holdings of the business.
If Mr Teoh, the company’s founder, wants to sell shares at this price, then the market can (and did) take it as a negative signal.
TPG shares are down 20% over the last year. Mr Teoh selling shares doesn’t really change the profit potential of the business. The TPG share price could be a cheap blue chip opportunity today, though there are other ASX dividend shares I’d rather look at for income.
