Alcoa Chairman Wraps Up $1 Million Sale

THE CHAIRMAN OF aluminum giant Alcoa (ticker: AA) has a strong track record of selling shares in the company at their peak. And just this week, he sold $1 million in shares. Alain Belda, who has served as chairman since January 2001 and stepped down as chief executive officer last year, sold 100,000 shares on May 4 for $1 million, or about $10.35 per share on average. Belda had not sold stock in the company since May 2008. He continues to own at least 5.5 million shares, most of which are in the form of exercisable options. That's less than 1% of the company's outstanding shares. The sale is the first at Alcoa since August, when the stock was trading at a significant premium to its current price. A director sold stock that month at about $31.70 per share. A spokesman for the company says Belda sold "for his own personal use," and that the shares were "next to nothing compared to his total holdings." Nonetheless, Belda's sales have tended to precede declines in the company's stock price. In July 2007, he sold more than $70 million in stock after exercising options, at more than $46 per share. Shares had peaked at $48.77 two days earlier, and were trading below $40 by the end of the month. He sold about $4 million in shares last May at prices ranging from $39 per share to $42.49. A few days after he sold, Alcoa's shares peaked at $44.77 on May 19, and have since lost more than three-quarters of their value. The stock closed on Thursday at $9.85, down 6.2% (the largest percentage loss among components of the Dow Jones Industrial Average) after Alcoa's Australian partner said it expects demand for aluminum to continue to fall. Belda's prescience is worth noting, says Ben Silverman, the research director at InsiderScore.com. "Twice in the past two years he's called tops for the stock with his sales," Silverman says. "That's certainly something investors should be aware of."