Form 4: Duolingo CFO Matthew Skaruppa Executes Stock Option and Sells Shares Under 10b5-1 Plan

Duolingo's CFO, Matthew Skaruppa, exercised stock options and sold shares of Class A Common Stock under a pre-arranged Rule 10b5-1 trading plan.

Summary

• On November 1, 2024, Matthew Skaruppa, the Chief Financial Officer of Duolingo, Inc., exercised a stock option to purchase 14,000 shares of Class A Common Stock at a price of $14.42 per share.
• Simultaneously, Skaruppa sold a total of 14,000 shares of Class A Common Stock in a series of transactions at weighted average prices ranging from $291.4138 to $297.3333.
• These sales were executed under a pre-arranged Rule 10b5-1 trading plan adopted on May 22, 2024.
• Following these transactions, Skaruppa directly owns 88,856 shares of Class A Common Stock and 14,427 derivative securities.

Sentiment

Score: 5

Explanation: This is a neutral disclosure of stock transactions by an executive. The use of a 10b5-1 plan suggests the transactions were pre-planned and not based on any specific recent information. Therefore, it doesn't strongly indicate positive or negative sentiment.

Industry Context

This filing is a routine disclosure of insider transactions. It is common for executives to utilize 10b5-1 plans to sell shares over time to avoid accusations of trading on inside information. The activity itself doesn't necessarily indicate a positive or negative outlook for the company.

Comparison to Industry Standards

• Executive compensation packages often include stock options, and subsequent sales are a normal part of wealth management.
• The use of a 10b5-1 trading plan is a standard practice to ensure compliance with insider trading regulations, similar to practices at companies like Coursera or Chegg.
• The reported weighted average sale prices are within a typical range for market transactions of Duolingo's stock.

Stakeholder Impact

• The transactions may have a minor impact on shareholders due to the change in ownership.
• The sales do not appear to have a direct impact on employees, customers, suppliers, or creditors.

Key Dates