Seagate Execs Are Selling Big, But Are Shorts Right to Back Off?

The tech sector is a wild ride right now, and one stock—Seagate Technology (STX)—is drawing conflicting signals from the people who know it best. Insiders are dumping shares in massive quantities, yet short sellers are pulling back. What’s going on here? Let’s dig into the data.

The Insider Sell-Off: A Red Flag or Just Profit-Taking?

The most striking move comes from CEO William Mosley, who unloaded over 5.6 million shares of Seagate between January and March 2025. At prices ranging from $86 to $103 per share, this was no small gesture. Let’s break it down:
- January 2: Sold 1.7 million shares at ~$86.
- February 3: Sold 1.9 million shares at ~$94.
- March 3: Sold 2.0 million shares at ~$102.

That’s over $500 million cashed out by the CEO alone. Meanwhile, Director Yolanda Lee also sold nearly 154,000 shares in late 2024 and early 2025.

But here’s the kicker: CFO Gianluca Romano and CTO Christopher Morris didn’t sell a single share in Q1. This raises questions: Is the CEO’s selling a sign of doubt, or just a structured payout tied to performance? Seagate’s Q1 2025 revenue soared 30.5% year-over-year to $2.16 billion, with strong guidance for Q2. Maybe he’s just taking profits in a rising stock.

Short Sellers Are Getting Nervous—Then Less So

Short interest in Seagate has been a rollercoaster. As of April 2025, 17.2 million shares were sold short, representing 8.17% of its float—a moderate level compared to peers like Super Micro (21.5% short) but higher than Dell (5.4%). However, short interest dropped 7.9% in April, the first decline in six months.

Why the pullback? The strong Q1 earnings and bullish guidance likely spooked bears. A Days to Cover ratio of 5.0 suggests short sellers aren’t panicking, but they’re no longer piling in. Institutions like Portman Square Capital and Millennium Management are still in, but their positions are shrinking.

The Contradiction: Insiders Sell, Shorts Retreat—Who’s Right?

This is the $64,000 question. On one hand, the CEO’s massive sales could signal he’s cashing out before a downturn—or just following a pre-set trading plan. Insiders often have to sell shares as part of compensation agreements, so it’s not always a red flag.

On the other hand, Seagate’s fundamentals look solid:
- Revenue Growth: 30.5% YoY in Q1, driven by data center and cloud storage demand.
- Market Position: As hybrid cloud storage and AI data needs explode, Seagate’s high-capacity drives are in demand.
- Valuation: At a P/E of 12.5x, it’s cheaper than peers like Pure Storage (28.3x) or Western Digital (16.1x).

The short sellers’ retreat suggests they’re not betting on a crash anymore. But the CEO’s actions? That’s a different story. If the top guy is selling like a rocket, even in a rising stock, it’s hard to ignore.

The Bottom Line: Proceed with Caution—But Don’t Panic

Seagate is a classic case of “don’t fight the tape.” The stock is up nearly 20% year-to-date despite the insider selling, and short interest is easing. If you’re bullish on data storage’s growth in AI, cloud, and enterprise tech, STX could still be a buy—but keep an eye on these factors:
1. CEO’s Motivation: Is this selling part of a pre-arranged plan, or genuine concern?
2. Short Covering: If shorts keep reducing their bets, it could fuel a rally.
3. Earnings Consistency: Can Seagate sustain its 30% revenue growth?

In the end, Seagate’s fundamentals are strong enough to shrug off the insider noise—for now. But if the CEO keeps selling, investors should too.

Final Take: Buy STX if you believe in data storage’s future, but set a tight stop-loss. This stock is a high-wire act between insider skepticism and bullish fundamentals.

Data-Driven Conclusion:
- CEO’s Sales: Over 5.6 million shares unloaded at steadily rising prices signal aggressive profit-taking.
- Short Interest Drop: 7.9% decline in April aligns with Q1’s stellar earnings (30.5% revenue growth) and optimistic guidance.
- Valuation Edge: P/E of 12.5x makes STX undervalued relative to storage peers.

Investors must decide: Is the CEO’s selling a headwind or a head fake? The data says the latter—for now. But keep watching those charts!