Form 4: Duolingo CTO Sells Shares Under Pre-Arranged 10b5-1 Plan

Duolingo's Co-Founder and CTO, Severin Hacker, executed planned sales of Class A Common Stock totaling 9,900 shares at prices up to $266.87, while also converting derivative securities.

Summary

• Severin Hacker, Duolingo's Co-Founder, Chief Technology Officer, Director, and 10% Owner, engaged in multiple transactions on November 4, 2025.
• He acquired 10,000 shares of Class A Common Stock at a price of $38.08 through the conversion of derivative securities.
• He sold a total of 9,900 shares of Class A Common Stock in multiple transactions at weighted average prices ranging from $257.92 to $266.8679.
• These sales were conducted pursuant to a Rule 10b5-1 trading plan adopted on September 11, 2024.
• He exercised stock options to acquire 10,000 shares of Class B Common Stock.
• He converted a total of 20,000 shares of Class B Common Stock into Class A Common Stock.
• Following these reported transactions, his direct beneficial ownership of Class A Common Stock is 72 shares.
• His direct beneficial ownership of Class B Common Stock is 114,305 shares.
• He also indirectly holds 2,886,917 shares of Class B Common Stock through the SBH Trust dated March 10, 2020, of which he is Trustee.
• Each share of Class B Common Stock is convertible at any time into one share of Class A Common Stock and has no expiration date, with automatic conversion under certain conditions.

Sentiment

Score: 5

Explanation: Neutral. While there are significant insider sales, they were conducted under a pre-arranged 10b5-1 plan, which mitigates negative sentiment. The transactions represent routine liquidity management for an executive.

Positives

• The reporting person exercised options and converted Class B shares to Class A, indicating value realization from long-held equity.
• Sales were executed at high prices, ranging up to $266.87 per share, demonstrating significant personal gain.
• The sales were pre-planned under a Rule 10b5-1 trading plan, which suggests a structured approach to liquidity rather than an immediate reaction to company performance.

Negatives

• Significant insider selling of 9,900 Class A Common Stock shares by a key executive (CTO and Co-Founder) could be perceived negatively by investors, even if pre-planned.
• The transactions represent a substantial liquidation of a portion of the reporting person's direct Class A holdings, although his overall beneficial ownership remains significant.

Future Outlook

The filing does not contain forward-looking statements or guidance, as it is a transactional report of insider stock activity.

Industry Context

This Form 4 filing details routine insider transactions for a key executive at Duolingo, a leading language-learning platform. Such filings are common for executives managing their personal equity holdings, often through pre-arranged trading plans, and do not inherently reflect specific industry trends or competitive positioning.

Comparison to Industry Standards

• This filing is a standard Form 4, reporting insider transactions. The use of a Rule 10b5-1 trading plan is a common practice among executives in publicly traded companies across various industries, including technology and education, to manage personal stock sales while adhering to insider trading regulations.
• The prices at which shares were sold reflect Duolingo's market valuation at the time of the transactions, which can be compared to valuations of other ed-tech or software-as-a-service (SaaS) companies, but this filing itself does not provide comparative financial performance data.

Related Party Transactions

• Shares held indirectly by SBH Trust dated March 10, 2020, of which Severin Hacker is Trustee, totaling 2,886,917 Class B Common Stock shares.

Stakeholder Impact

• Shareholders: May view the insider sales with caution, though the 10b5-1 plan context typically reduces concerns about management's confidence in the company's future. The conversion of Class B to Class A shares increases the float of Class A shares over time.
• Employees: No direct impact mentioned.
• Customers: No direct impact mentioned.
• Suppliers: No direct impact mentioned.
• Creditors: No direct impact mentioned.

Next Steps

• The filing does not mention any specific future actions, events, or milestones for the company or the reporting person, beyond the ongoing execution of the 10b5-1 plan.

Key Dates

Recommendation

This Form 4 filing details routine insider transactions by a co-founder and CTO, involving the conversion of derivative securities and subsequent sales under a pre-arranged 10b5-1 plan. While significant in volume, these sales are expected and do not typically signal a change in the company's fundamental outlook or management's confidence. The filing provides no new information regarding Duolingo's operational performance, strategic direction, or financial health that would warrant a change in investment thesis. Therefore, a 'hold' recommendation is appropriate, maintaining existing positions based on the company's core business fundamentals rather than this specific insider transaction.

Keywords

Duolingo, DUOL, Severin Hacker, Insider Trading, Form 4, Stock Sales, 10b5-1 Plan, Class A Common Stock, Class B Common Stock, CTO, Co-Founder, Equity Conversion