Robert Reffkin Sells 3M Compass Shares

Compass CEO Robert Reffkin is selling a chunk of his stock in the company on the heels of the firm’s first quarterly profit since its public debut in 2021.

Earlier this week, Reffkin notified the Securities and Exchange Commission of his plan to cash in 3 million shares for an estimated value of $13 million, according to filings with the agency.

Another entity, called 2021 Reffkin Remainder Interest Trust, also indicated it would sell 500,000 shares for roughly $2 million.

The chairman is trading his shares under a 10b51 plan, which allows company officers and directors to pre-plan stock sales to avoid accusations of insider trading.

A spokesperson for the company said the plan was standard among CEOs of public companies and would allow Reffkin to offload some of his shares through the end of next year for “tax planning purposes.”

“My dedication to Compass hasn’t wavered, and I’m not going anywhere,” Reffkin wrote in an internal email. “I will still be Compass’ largest individual shareholder and very much believe in the future upside of the value of Compass stock.”

Reffkin owns more than 28 million shares in the company, making him the third largest stockholder behind institutional investors SoftBank and the Vanguard Group, Simply Wall St shows.

In the last year, company insiders sold nearly $4 million more than they purchased, according to the data analytics platform. Individual insiders account for roughly 6 percent of the firm’s ownership.

Earlier this year, Softbank sold close to $75 million worth of its shares in Compass, marking its fifth major sale since last year. The firm’s largest investor — which invested more than $1 billion in Compass ahead of its IPO — sold 13 percent of its shares in December.

At the time of publication, Compass stock was trading at $4.70 and had a market capitalization of $2.4 billion.

At the end of 2022, institutional investors ditched Compass stock, as the company racked up quarterly losses and as high mortgage rates and low inventory stalled residential home sales nationwide. Discovery Capital Management and Wishbone Management sold 25 and 30 percent of their holdings, respectively.

Compass posted a net income of $20.7 million in the second quarter, a significant upswing from the $133 million it lost in the previous three-month period. It notched an adjusted EBITDA over $77 million — more than double the $30.1 million it reported in the same quarter in 2023.

The firm reported free cash flow over $40 million, though its cash on hand gains is likely due, in part, to an increase in commissions owed but not yet paid to agents. Compass reached cash flow positivity by the second quarter of last year, which also corresponded in an uptick of commissions payable.