Market Commentary

Kevin Hern Sells Millions of Microsoft Shares

Matthew Levy, CFA · 1 minute read

Kevin Hern, who has been serving as the US Representative for Oklahoma's 1st congressional district since 2018, recently made waves with a massive sale of Microsoft (MSFT:US). Mr. Hern disclosed two sales totaling $15,001 - $50,000 and $1,000,001 - $5,000,000 from January 04 and January 31 at average prices of $247.81 and $229.10, respectively.

So far, that trades are hugely underwater - the stock currently sits at $258.06 as of Feb 17 close, producing an opportunity loss for the congressman of a significant amount. Clearly, Mr. Hern does not like the recent investment from Microsoft into OpenAI, the creators of the much-hyped ChatGPT.

It appears that the congressman’s trades are in line with recent analyst expectations, as MSFT recently experienced several downgrades from top Wall Street firms. On January 25, 2023, BMO Capital Markets downgraded MSFT from Outperform to Market Perform, reducing the price target from $267 to $265. The downgrade was primarily due to concerns about Microsoft's growth outlook and the impact of competition in the cloud computing space. Additionally, Guggenheim downgraded MSFT from Neutral to Sell on January 17, 2023, citing potential deceleration in Azure growth and a slowing PC market. UBS also downgraded MSFT from Buy to Neutral on January 4, 2023, reducing the price target from $300 to $250, due to concerns about the company's valuation.

Born in 1961, Hern has a background in business and entrepreneurship, with a net worth of up to $93 million. In Congress, Hern has focused on issues such as job creation, small business development, and tax reform. He is a member of the House Committee on Small Business and has advocated for policies that support small businesses and entrepreneurs. Hern is also a strong supporter of the Second Amendment and has been endorsed by the National Rifle Association.