Form 4: Duolingo Co-Founder and CTO Severin Hacker Reports Significant Stock Transactions Under 10b5-1 Plan

Duolingo's Co-Founder and CTO, Severin Hacker, reported the exercise of stock options and subsequent sales of Class A Common Stock totaling 9,900 shares, executed under a pre-arranged 10b5-1 trading plan.

Summary

• Severin Hacker, Duolingo's Co-Founder, Chief Technology Officer, Director, and 10% Owner, engaged in multiple stock transactions on June 5, 2025.
• He exercised stock options to acquire 10,000 shares of Class B Common Stock at an exercise price of $38.08 per share.
• He also converted a total of 20,000 shares of Class B Common Stock into Class A Common Stock.
• Concurrently, he acquired 10,000 shares of Class A Common Stock (likely from one of the Class B conversions) and sold a total of 9,900 shares of Class A Common Stock through multiple transactions.
• The Class A sales were executed at weighted average prices ranging from $519.1537 to $531.12 per share.
• These sales were conducted under a Rule 10b5-1 trading plan that was adopted on September 11, 2024.
• Following these reported transactions, Mr. Hacker directly owns 72 shares of Class A Common Stock and 86,075 shares of Class B Common Stock.
• Additionally, 2,956,917 shares of Class B Common Stock are indirectly beneficially owned through the SBH Trust dated March 10, 2020, for which Mr. Hacker serves as Trustee.

Sentiment

Score: 5

Explanation: Neutral. The filing reports routine insider transactions (option exercise and sales under a 10b5-1 plan), which are generally not indicative of positive or negative company performance, but rather personal financial planning and liquidity management.

Positives

• The transactions, particularly the sales, were executed pursuant to a Rule 10b5-1 trading plan, indicating they were pre-scheduled and not a reaction to recent company performance or news.
• The exercise of stock options at a low price ($38.08) and subsequent sale of Class A shares at significantly higher prices (over $500) demonstrates a substantial realized gain for the insider, reflecting the company's stock appreciation.

Negatives

• The significant volume of insider selling, even if pre-planned, can sometimes be perceived negatively by the market as it reduces the insider's direct equity stake in the company.

Future Outlook

This Form 4 filing reports past insider transactions and does not contain forward-looking statements or guidance regarding Duolingo's future performance or outlook.

Management Comments

• The filing indicates that the sales were effected pursuant to the Reporting Person's Rule 10b5-1 trading plan adopted on September 11, 2024, which suggests a pre-scheduled disposition of shares.

Industry Context

Insider transactions, particularly those executed under Rule 10b5-1 plans, are a common practice among executives in the technology and education technology sectors. These plans allow insiders to manage their equity holdings and liquidity in a compliant manner, often as part of long-term financial planning. Duolingo operates in the online language learning market, where executive compensation frequently includes significant equity components.

Comparison to Industry Standards

• Insider sales executed under Rule 10b5-1 plans are a standard and widely accepted practice for executives to diversify their personal holdings and manage tax liabilities in a compliant manner, aligning with corporate governance best practices.
• This document focuses solely on individual stock transactions and does not provide company-specific financial results or operational metrics that would allow for a direct comparison to industry benchmarks or competitors like Babbel, Rosetta Stone, or Coursera.

Related Party Transactions

• Shares held by SBH Trust dated March 10, 2020, of which the Reporting Person (Severin Hacker) is Trustee, are considered indirectly beneficially owned. This is a common arrangement for executive shareholdings.

Stakeholder Impact

• Shareholders: The sale of shares by a co-founder and CTO, even if pre-planned, might lead to short-term market speculation. However, the execution under a 10b5-1 plan mitigates concerns about opportunistic selling. The significant profit realized from option exercise highlights the value creation for long-term shareholders.
• Employees: No direct impact on employees is indicated by this filing, as it pertains to personal stock transactions of an executive.

Next Steps

• No specific future actions, events, or milestones for the company are mentioned in this insider transaction report.

Key Dates

Recommendation

Keywords

Duolingo, DUOL, Severin Hacker, Form 4, Insider Trading, Stock Option Exercise, Stock Sale, 10b5-1 Plan, Class A Common Stock, Class B Common Stock, Corporate Governance