The stock of United States Steel experienced a significant surge of 26% on December 18th following the announcement of its acquisition by Japan's Nippon Steel. This news was accompanied by U.S. Steel President and CEO, David B. Burritt, selling a substantial number of shares in the company.
However, it is crucial to note that this should not be viewed as an opportunistic move by an executive exploiting the rising stock price. Burritt sold 252,458 U.S. Steel shares for a total of $12.6 million, averaging at $50.01 per share through planned transactions. This information was disclosed in a form filed with the Securities and Exchange Commission. It is important to understand that Burritt had a pre-established Rule 10b5-1 plan in place, which automatically executes trades when certain predetermined conditions are met.
Despite this sale of shares, Burritt still retains a substantial stake in U.S. Steel. Currently, he possesses 581,609 shares in a personal account, an additional 290,082 shares through a trust, and 11,385 shares in a 401(k) plan.
U.S. Steel clarified that Burritt's trading plan was established as part of his personal financial planning in early June. At that time, U.S. Steel shares were trading at $22.63. The sale price set in the plan was $49.87. The merger news prompted the sale as it surpassed the predetermined threshold.
Regarding the acquisition itself, Burritt expressed confidence, stating that the combination of the two companies would be mutually beneficial for all involved parties.
While the transaction is anticipated to conclude in the third quarter of 2024, potential obstacles might arise along the way. The White House has voiced concerns regarding national security and has called for a thorough examination of the deal. Furthermore, certain members of Congress have vowed to impede the acquisition to safeguard American jobs.
