03-08-2016, 01:37 AM
Another substantial ($16M+) sell from an Ellie Mae (ELLI) insider (the VP). We're not worried this is a negative sign for the business as these officials do this routinely. What bugs us a little is that it underlines our thesis (set out here) that ELLI earnings should basically use GAAP figures, which are less than half the non-GAAP ones that the street uses.
Simply because executive incentive pay makes up most of the difference, and officials sell routinely (and the share buyback program moppes it up), it's basically just management pay, in our view. ELLI is by no means the only company to practice this, and the business is otherwise run fantastically.