SVCO

Silvaco ($SVCO): New Management's Consecutive Buying After Former CEO's Purchase-Then-Resignation Saga, Major Shareholder Selling Looms

10/08/2025 22:54

Recent insider trading patterns at Silvaco Group ($SVCO) are sending mixed signals about the future direction of this semiconductor design software company. The small-cap firm with a $165 million market capitalization maintains a niche position in the semiconductor design simulation market through its TCAD, EDA, and SIP solutions, but shares have plummeted over 70% from $18 in June 2024 to the current $5 range. Most notable is the trajectory of former CEO Babak Taheri. He purchased a total of 25,000 shares across May 16 and 19, paying $4.93 and $4.86 per share respectively for $122,992 worth of stock. This occurred when the stock was languishing near annual lows. However, just three months later on August 22, the company announced his resignation as CEO, appointing Walden Rhines as his replacement. The CEO transition occurring shortly after personal stock purchases suggests internal conflicts or strategic pivoting. The new management regime shows more positive signals. Christopher Zegarelli, appointed CFO on September 15, received 5,100 Restricted Stock Units (RSUs) upon joining, structured with four-year vesting to align with long-term performance. More compelling is Director Anthony Ngai's consecutive buying spree. He purchased 9,700 shares worth $61,648 across four consecutive days from September 8-11, with an average price of $5.26 per share as the stock traded sideways in the $5-6 band, demonstrating strong conviction from the board level. However, persistent selling pressure from the Pesic family remains a burden. Illiya Pesic, Katherine Ngai-Pesic, and Yelena Pesic are systematically selling under 10b5-1 plans established December 12, 2024. Notably, their selling plans include tiered conditions: additional shares of 160,000-180,000 may be sold when stock prices reach thresholds between $9.98 and $19.98, creating significant selling pressure during any recovery. The company's business transformation efforts are also influencing insider trading patterns. The Mixel acquisition, announced in late July and completed in early August, expanded Silvaco's serviceable addressable market by $110 million. This adds to $600 million in additional market opportunities secured through 2025 acquisitions. While Mixel CEO Ashraf Takla joined Silvaco and capability expansion continues, earnings improvement remains elusive. Financially, the company holds $55.5 million in cash, providing stable short-term liquidity despite operating losses. With TTM revenue of $54.97 million against a net loss of $31.08 million, and a low debt ratio of 6.54%, leverage risks are limited. Q3 2025 guidance projects revenue of $14-18 million with non-GAAP net income per share ranging from -$0.12 to $0.02, suggesting potential turnaround. Insider trading synthesis reveals a complex dynamic: departing management, new leadership investment conviction, and existing major shareholder selling pressure. Particularly, aggressive buying by new directors and management may reflect judgments that the $5-6 range represents excessive fundamental discounting. Conversely, the Pesic family's 10b5-1 plans will likely create substantial resistance during any recovery. Current share price of $5.63 trades at a 43% discount to Wall Street's $10 consensus target. Given insider trading patterns, earnings improvement under new management and acquisition synergy realization become key variables. Investors should closely monitor quarterly earnings alongside Pesic family selling schedules and new management's strategic execution capabilities.