What Is Form 144?

The short version

Form 144 is a notice that a company insider, or another person with a control relationship to the company, plans to sell shares. It is filed with the Securities and Exchange Commission (SEC) at about the same time the seller places the order with a broker. The form gives the number of shares, their rough market value and the approximate date of the sale.

The key word is “plans.” A Form 144 is a statement of intent. The sale might be smaller than the notice, it might happen over several days, or it might not happen at all. The record of what was actually sold usually shows up later on a Form 4.

Why the form exists

Most shares that trade on an exchange can be sold by anyone, at any time. Two kinds of stock are different.

• Restricted securities are shares bought directly from the company or from an affiliate in a private deal that was not registered with the SEC. Shares from a private placement or from an early employee stock plan are common examples.
• Control securities are shares held by an affiliate of the company. An affiliate is a person who controls the company, is controlled by it, or is under common control with it. In practice that usually means senior officers, directors and large shareholders, even if they bought their shares on the open market.

Federal securities law generally requires shares to be registered before they are sold to the public. Rule 144, written under the Securities Act of 1933, is a “safe harbor”: if a seller meets its conditions, the sale is not treated as an illegal public distribution. One of those conditions, for affiliates selling more than a small amount, is filing Form 144.

Who has to file

Under Rule 144(h), a notice on Form 144 is required when the shares to be sold in any three-month period are more than 5,000 shares or have an aggregate sale price of more than $50,000. Either test is enough to trigger the filing.

The filing duty falls on affiliates. Before amendments that took effect on February 15, 2008, the thresholds were much lower (500 shares or $10,000), and non-affiliates selling restricted stock in a reporting company also had to file. The 2008 changes raised the thresholds and dropped the Form 144 requirement for those non-affiliates.

So when you see a Form 144 today, the seller is almost always an officer, a director, a large holder, or someone tied to one of them, such as a family trust or a foundation the insider controls.

The other Rule 144 conditions, briefly

Form 144 is one piece of the rule. An affiliate relying on Rule 144 also has to meet other conditions, and some of them show up on the form itself.

• Holding period. Restricted securities must be held for at least six months if the company has been filing reports with the SEC for at least 90 days, or one year if it has not. Control securities bought on the open market have no holding period.
• Volume limit. In any three months, an affiliate may sell no more than the greater of 1% of the shares outstanding or the average weekly trading volume over the four calendar weeks before the notice.
• Manner of sale. For stock, sales generally have to go through ordinary brokers’ transactions or a market maker.
• Current public information. The company must be up to date on its required reports.

These limits are one reason large holders spread sales over weeks or months.

Timing, and the 2023 change to electronic filing

Rule 144(h) says the notice must be transmitted to the SEC at the same time the seller places the sell order with a broker, or executes the sale directly with a market maker. The seller must also have a “bona fide intention” to sell within a reasonable time after filing.

For decades, most Forms 144 were filed on paper. Brokers prepared them and mailed them to the SEC, and they were hard for the public to find. In June 2022 the SEC adopted rule amendments requiring electronic filing, and since April 13, 2023 every Form 144 for a company that reports to the SEC must be filed on EDGAR, the SEC’s public filing system. EDGAR accepts these notices from 6:00 a.m. to 10:00 p.m. Eastern time.

That change is why planned sales are now visible on the day they are filed. Before 2023, a reader often learned about a large insider sale only from the Form 4, which is due within two business days after the trade.

How to read a Form 144

The electronic form is short. These are the fields that matter most.

Issuer and seller. The company’s name and the person “for whose account the securities are to be sold,” along with that person’s relationship to the company (for example, “Officer,” “Director” or “10% holder”). The seller can be a trust or a company the insider controls.

Securities to be sold. The class of stock, the broker handling the sale, the number of shares to be sold, their aggregate market value, the number of shares outstanding, the approximate date of sale and the exchange. The market value is an estimate made at filing, based on a recent price, so it will not match the final proceeds.

How the shares were acquired. A table showing the date the seller got the shares and how: an option exercise, vesting of restricted stock units, a gift, a purchase. This tells you whether the sale is cashing out compensation, which is common, or selling stock the insider once paid for.

Securities sold in the past three months. Earlier sales by the same seller. A long list here usually means a steady selling program.

Rule 10b5-1 date. A field labeled “Date of plan adoption or giving of instruction, if relying on Rule 10b5-1.” If it is filled in, the sale is part of a prearranged trading plan, and the seller’s statement that they know no undisclosed bad news about the company is made as of that adoption date. Our guide to 10b5-1 trading plans explains why that matters.

What a Form 144 can and cannot tell you

A Form 144 is an early signal of supply. It can flag a large planned sale days before the Form 4 arrives, and the plan date tells you whether the decision was made months earlier.

It has real limits:

• The number of shares is a ceiling for that notice, not a confirmed sale.
• The market value is an estimate.
• Many notices cover shares that came from stock awards, which executives routinely sell for taxes and diversification.
• People who are not affiliates, and sales under the thresholds, do not appear at all.

A planned sale is not evidence that something is wrong at the company. Insiders sell for many ordinary reasons, and our guide on whether insider buying is a good signal explains why purchases are generally treated as more informative than sales.

How WallStPal shows planned sales

Our planned sales page lists Form 144 notices filed over the past 30 days. Each row shows the filing date, the stock, the seller and their relationship to the company, the number of shares, the estimated market value and the approximate sale date, with a link to the original notice on EDGAR.

The column “Form 4 sale since?” checks whether we have found a matching Form 4 sale by the same person within 21 days of the notice. “Not yet” means we have not found one. It does not mean the sale was cancelled, since the Form 4 may still be on its way or the name may be written differently. When the sale does show up, you can read it on our insider trades pages and check its transaction codes.

Where the rule comes from

• Rule 144 itself, at 17 CFR 230.144, including paragraph (h) on the notice and paragraph (e) on volume limits.
• The SEC’s blank Form 144 and its instructions.
• The SEC’s page on how to file Form 144 electronically.
• A summary of the 2023 electronic filing change from Simpson Thacher, and of the 2008 amendments from Holland & Knight.

Examples

Jeff Bezos and Amazon, July 2024. After the market closed on a Tuesday in early July 2024, Bezos filed a notice of a proposed sale of 25 million Amazon shares, worth almost $5 billion at the time, as Reuters reported on July 3, 2024. The notice came as Amazon shares were at a record high, and it was reported before any of the sales appeared on Form 4. Bezos filed further notices later that year, such as this Form 144 from November 1, 2024. Electronic filing is what made these notices readable within hours.

Jensen Huang and Nvidia, June 2024. In June 2024 Nvidia insiders filed a run of Form 144 notices. According to The Motley Fool, the SEC was notified that the chief executive, Jensen Huang, planned to sell 120,000 shares on June 13, 2024, and the company’s insiders had filed 10 Forms 144 since May. Readers who followed the notices could see the planned selling before the Form 4s confirmed each trade.

Explain it like I’m 13

Imagine you own a big stack of rare trading cards, and you are one of the club’s leaders. The club has a rule: before a leader sells a lot of cards, they have to pin a note on the board that says, “I plan to sell about this many cards, around this date.”

Form 144 is that note. It does not prove the cards were sold. It just tells everyone the leader intends to sell. Later, a second note (the Form 4) says how many were really sold and at what price.

WallStPal explains public filings. Nothing here is investment advice. Editorial policy · Corrections