SVCO

Silvaco Group ($SVCO) Mixed Insider Signals: Director's Buying Spree vs Ex-CEO's Buy-Then-Quit

09/15/2025 22:02

Silvaco Group ($SVCO), a specialized semiconductor design automation software company, is showing intriguing insider trading patterns that deserve investor attention. Founded in 1984 and based in California, the company provides TCAD (Technology Computer-Aided Design) software, EDA (Electronic Design Automation) tools, and semiconductor IP solutions to global markets. The most notable activity comes from director Anthony Ngai, who made consecutive purchases over four trading days from September 8-11, acquiring 11,700 shares for $61,647. His average purchase prices ranged from $5.16 to $5.32, demonstrating strong conviction at current price levels. This appears to be more than portfolio rebalancing - it signals confident investment based on insider knowledge. More intriguing, however, is former CEO Babak Taheri's trajectory. He purchased approximately 25,000 shares for $123,000 in mid-May at prices between $4.86-$4.99, only to resign from his CEO position just three months later in August. This sequence suggests a potential disconnect between management's initial outlook and subsequent realities. The Pesic family's systematic selling also warrants attention. Through 10b5-1 plans executed in March and June, they've been methodically reducing positions, with conditions allowing up to 160,000-180,000 additional shares to be sold if the stock reaches $9.98-$19.98. Given current prices around $5, these thresholds suggest they anticipated significant upside when setting these plans. Silvaco's stock has suffered a brutal 70%+ decline over the past year, falling from $17-18 in June 2024 to current levels around $5. The collapse accelerated in October following multiple headwinds including a $17 million punitive damages award, persistent earnings misses, and executive turnover. Financial performance remains challenging. Q1 2025 revenue dropped 11.3% year-over-year to $14.1 million, missing analyst expectations of $15.99 million. The company posted an adjusted loss of $0.07 per share versus expected earnings of $0.01. While Silvaco maintains $39 million in cash reserves, ongoing cash burn raises sustainability concerns. Yet some positive developments are emerging. The July completion of Mixel acquisition strengthened capabilities in low-power, high-performance mixed-signal connectivity IP solutions. New CEO Walden Rhines brings industry veteran credentials. Management projects 2025 revenue guidance of $66-72 million, representing 11-21% growth. For investors, the conflicting insider signals are telling. Director Ngai's consecutive buying suggests significant undervaluation at current levels, while the former CEO's purchase-then-resignation pattern hints at greater near-term challenges than initially anticipated. These mixed signals indicate the company sits at a critical inflection point. From current $5 levels, substantial upside exists to the Pesic family's selling thresholds ($9.98+), representing nearly 100% potential gains. Analyst price targets around $14.50 suggest almost 200% upside potential - though this requires successful operational turnaround. Near-term catalysts include new CEO performance and Q3 earnings results. Longer-term success depends on semiconductor industry recovery and positioning in growth areas like AI and IoT. Given current uncertainties, a wait-and-see approach appears prudent, with entry consideration after clearer improvement signals emerge.