CEO of Marvell Technology Makes His First Purchase Ever – Insider Weekends

Marvell Technology Inc (MRVL): $79.85

Market Cap: $69.17B

Enterprise Value: $72.73B

Two weeks ago, we wrote about the ongoing campaign against Southwest Airlines (LUV) by the activist investment firm Elliott Management. This week, we chose to write about a company that has also seen activist involvement in the past – Marvell Technology (MRVL), which saw the activist fund Starboard Value build a position in 2016.

Company Background

Founded in 1995 by Sehat Sutardja, his wife Weili Dai, and his brother Pantas Sutardja, Marvell Technology is a designer, developer, and supplier of semiconductor solutions, specializing in data infrastructure technology. Marvell operates as a fabless supplier, offering a wide range of integrated circuits and system-on-chip (SoC) solutions used in various applications such as data centers, enterprise networking, automotive, and consumer electronics. The company’s core technologies focus on data storage, network infrastructure, and wireless connectivity. 

Marvell expanded its product offerings through a series of acquisitions:

• 2018: Cavium, a fabless semiconductor and data infrastructure company
• 2019: Aquantia, which manufactured high-speed transceivers
• 2021: Inphi, a $6.5 billion deal for a company that manufactured  high-speed analog and mixed-signal semiconductor components

Through these strategic acquisitions, Marvell essentially created a semiconductor powerhouse positioned for end-to-end technology leadership in data infrastructure.

Activist Involvement and Leadership Changes

As mentioned earlier, all this growth didn’t come without associated growing pains. Starboard Value began building a stake in Marvell in 2016 (approximately 6.5% position in the company) and soon after, CEO Sehat Sutardja and President Weili Dai were ousted from their positions.

This expulsion happened after the Board’s independent audit committee found “certain accounting and internal control matters” – no fraudulent activity was outright detected, but certain issues were brought up that led to both Mr. Sutardja’s and Ms. Dai’s removals. Additionally, five new independent Directors were added to the company’s Board. The board was expanded once again this April, when Marvell agreed to add three new Starboard-nominated Directors to the Board.

Following Mr. Sutardja’s removal from his position as CEO, Matthew J. Murphy took over as both President and CEO. Prior to joining Marvell in July 2016, Murphy had a distinguished 22-year career at Maxim Integrated, an analog devices company, where he held various leadership positions. His last role at Maxim was EVP of Business Units and Sales and Marketing, overseeing all product development and go-to-market activities. He also served as Senior Vice President of the Communications and Automotive Solutions Group at Maxim.

Mr. Murphy also serves on the boards of several industry organizations, including the Semiconductor Industry Association (SIA) and the Global Semiconductor Alliance (GSA), where he is currently the Board Chairman. He previously served on the Board of Directors of eBay Inc. from March 2019 to June 2022.

Since Mr. Murphy joined Marvell, the company’s stock price has run up by more than 750%. Granted, a lot of that movement has happened in the last few years given the big run up in all semiconductor stocks. However, the company’s growth through strategic acquisitions also likely helped this upward trajectory. We were quite intrigued to see Mr. Murphy purchasing $1 million worth of Marvell stock even after the company’s share price had run up by more than 60% in the last year.

Insider Transactions

Looking at a list of all of Mr. Murphy’s insider transactions, we can see that this is his first purchase of Marvell since he joined the company in 2016. Furthermore, Mr. Murphy is a Flip Flopper – looking at the image below, you can see that just over a month ago, he had been selling Marvell shares under a 10b5-1 trading plan.

We track insiders that suddenly switch from selling to buying shares (or vice versa), thus violating the SEC’s Short Swing Profit Rule in our Flip Floppers screen. The SEC requires that any profits made on a flip flopping trade must be given back to the company. To see an insider suddenly switch from selling to buying as Mr. Murphy did, is quite significant. These flip flopping insiders are sending us a signal that they think the prevailing winds have changed and that they are willing to give up some short-term profits to make even more money down the road.

Recent Financial Performance

It’s particularly interesting that Mr. Murphy is choosing to purchase shares of Marvell now, especially considering that Q2 fiscal 2025 results (the quarter ended on August 3, 2024) were a bit of a mixed bag. The company reported revenue of $1.27 billion for Q2 fiscal 2025, a decrease of 5.1% from the $1.34 billion of revenue recorded in Q2 fiscal 2024. Marvell also continues to remain unprofitable, recording a net loss of $193.3 million for the quarter, which was a slight improvement from the net loss of $207.5 million in the same quarter last year. This decline in net loss came from operational improvements within the company, with gross and operating margins increasing as can be seen in the charts below.

Surprisingly, despite their history of acquisitions, Marvell isn’t too heavily leveraged. The company has approximately $3.8 billion of net debt, which in the context of a market cap of $69.17 billion isn’t large. The company is also generating positive free cash flow. Trailing valuation metrics like Price/Sales metric at 13.08 and an EV/EBIDTA of 72.99 make this insider purchase even more surprising.

Conclusion

Overall, Marvell Technology is in a space where their products are in high demand, which reflects favorably upon the company’s future earnings. Net losses have been reducing over the years and the company could be close to the turnaround point where they finally swing to becoming profitable, which could be the reason why Mr. Murphy chose to start purchasing shares. This is reflected in analyst estimates for the company where 22 analysts have revised their estimates upwards in the last 90 days, with only five analysts revising their estimates down. The company is expected to earn $2.52 in fiscal 2026 (ended January 2026) giving it a forward P/E of 31.73.

Welcome to edition 756 of Insider Weekends. Insider buying increased last week with insiders purchasing only $57.13 million of stock compared to $21.48 million in the week prior. Insider selling also increased to $1.42 billion compared to $979.8 million in the week prior.

Sell/Buy Ratio: The Insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by the total insider purchases that week. The adjusted ratio this week declined to 24.96. In other words, insiders sold more nearly 25 times as much stock as they purchased. This week the Sell/Buy ratio was favorable compared to the prior week, when the ratio stood at 45.60.

Notable Insider Buys:

1. Marvell Technology Inc (MRVL): $79.85

Chairman of the Board and CEO Matthew J. Murphy acquired 13,000 shares of this semiconductor company, paying $77.63 per share for a total amount of $1.01 million. Mr. Murphy increased his stake by 6.22% to 221,915 shares with this purchase.

You can view the list of recent insider transactions for Marvell Technology Inc here.

2. Sonida Senior Living Inc (SNDA): $26.97

Director Michael Simanovsky acquired 34,448 shares of this senior living facilities company, paying $24.07 per share for a total amount of $829,086.

You can view the list of recent insider transactions for Sonida Senior Living Inc here.

3. Neogen Corp (NEOG): $14.5

CEO John Edward Adent acquired 14,500 shares of this food safety and animal health solutions company, paying $13.80 per share for a total amount of $200,100. Mr. Adent increased his stake by 7.18% to 216,477 shares with this purchase.

You can view the list of recent insider transactions for Neogen Corp here.

4. Richardson Electronics Ltd (RELL): $13.56

Shares of this engineered electronics solutions company were acquired by 3 insiders:

• Director James Benham acquired 5,000 shares, paying $13.33 per share for a total amount of $66,630. Mr. Benham increased his stake by 54.31% to 14,206 shares with this purchase.
• Director Paul J. Plante acquired 3,823 shares, paying $13.33 per share for a total amount of $50,961. Mr. Plante increased his stake by 41.53% to 13,029 shares with this purchase.
• Director Kenneth Halverson acquired 2,000 shares, paying $13.02 per share for a total amount of $26,039. Mr. Halverson increased his stake by 17.53% to 13,406 shares with this purchase.

You can view the list of recent insider transactions for Richardson Electronics Ltd here.

5. Worthington Enterprises Inc (WOR): $41.81

EVP and CFO Joseph B. Hayek acquired 2,500 shares of this diversified industrial manufacturing company, paying $40.21 per share for a total amount of $100,525. Mr. Hayek increased his stake by 1.50% to 168,875 shares with this purchase.

You can view the list of recent insider transactions for Worthington Enterprises Inc here.

You can view the full list of purchases from this Insider Buying page.

Notable Insider Sales:

1. Carvana Co. (CVNA): $191.31

10% owner Ernest C. Garcia II sold 400,000 shares of this online car dealership, for $191.95, generating $76.78 million from the sale.

You can view the list of recent insider transactions for Carvana Co. here.

2. nCino Inc. (NCNO): $36.58

Shares of this cloud-based fintech company were sold by 3 insiders:

• Director Jeff Horing sold 1,666,025 shares for $36.05, generating $60.05 million from the sale.
• Chief Product Officer Sean Desmond sold 30,000 shares for $34.77, generating $1.04 million from the sale.
• CFO & Treasurer Gregory Orenstein sold 4,333 shares for $35.04, generating $151,849 from the sale. These shares were sold as a result of exercising options prior to the sale.

You can view the list of recent insider transactions for Ncino Inc. here.

3. Constellation Brands Inc. (STZ): $241.52

Shares of this alcoholic beverages company were sold by 2 insiders:

• Director Robert Sands sold 119,274 shares for $242.37, generating $28.91 million from the sale.
• EVP & President Wine and Spirits Samuel J. Glaetzer sold 1,510 shares for $245.57, generating $370,809 from the sale. (Convertible Shares)

You can view the list of recent insider transactions for Constellation Brands Inc. here.

4. Workday Inc. (WDAY): $244.48

Shares of this cloud-based enterprise solutions for HR and finance were sold by 2 insiders:

• Co-Founder, Former Chairman, and 10% Owner David A Duffield sold 56,000 shares for $242.01, generating $13.55 million from the sale.
• Director Wayne Frederick sold 1,828 shares for $241.85, generating $442,106 from the sale.

You can view the list of recent insider transactions for Workday Inc. here.

5. Atlassian Corporation (TEAM): $191.7

CEO and Co-Founder Michael Cannon-Brookes sold 31,792 shares of this software company that develops collaboration, project management, and productivity tools for $190.87, generating $6.07 million from the sale.

You can view the list of recent insider transactions for Atlassian Corporation here.

You can view the full list of sales from this Insider Sales page.

The list of all insider purchases and sales by management people is only available to InsideArbitrage Premium and Plus members.

Disclaimer: I hold a long position in Workday (WDAY). Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.