Warby Parker Co-CEO Sells $2.6 Million in Stock as Shares Lag the S&P 500

David Abraham Gilboa, co-chief executive officer of Warby Parker (NYSE:WRBY), sold 94,906 shares in multiple open-market transactions from Tuesday through Thursday, as disclosed in a recent SEC Form 4 filing.

Transaction summary

Transaction value based on SEC Form 4 weighted average purchase price ($27.51); post-transaction value based on Thursday market close ($28.30).

Key questions

• What was the rationale and mechanism behind this sizable share disposition?
  The transaction involved the conversion and sale of derivative securities (options on Class A Common Stock), executed under a pre-established Rule 10b5-1 trading plan, signaling planned share monetization rather than opportunistic trading.
• How does the sale compare to the insider's prior selling activity?
  This trade was in line with the recent median sell size of 84,953 shares, but the percentage of holdings sold (71.82%) far exceeded the recent median of 22.31%, reflecting the diminished remaining direct equity available for sale.
• What is the post-sale position, and how does it affect future insider sale capacity?
  Following this transaction, Gilboa’s direct equity stake stands at 37,247 shares (0.03% of shares outstanding); however, he still holds a substantial number of shares through derivative securities.
• Did indirect holdings or related entities participate in this transaction?
  No indirect holdings or related entities were involved; all shares sold originated from direct personal holdings, with indirect ownership standing at zero after the transaction.

Company overview

Company snapshot

• Warby Parker offers prescription eyeglasses, sunglasses, contact lenses, and related accessories, as well as eye exams and vision tests through retail stores and digital channels.
• The company operates a vertically integrated, direct-to-consumer business model, generating revenue primarily from eyewear product sales and vision services.
• It targets value-conscious consumers in the United States and Canada seeking affordable, stylish eyewear and accessible vision care.

Warby Parker is a leading direct-to-consumer eyewear company with a growing retail footprint and a strong digital presence. The company leverages a vertically integrated model to control costs and deliver value to customers, while expanding its reach through both physical stores and online platforms. Its differentiated approach combines accessible price points, design-forward products, and integrated vision care services to compete effectively in the eyewear market.

What this transaction means for investors

Even after a strong operational year, Warby Parker shares continue to lag broader benchmarks, with the S&P 500 up roughly 18% over the same period that's seen WRBY stock up about 11%. That said, the Form 4 shows the sale was executed under a Rule 10b5-1 trading plan adopted in September, signaling a preplanned move rather than a reaction to near-term developments. Also of note, the shares sold were Class A common stock derived from derivative positions, and Gilboa retains very meaningful exposure through remaining equity and derivative holdings.

Operationally, Warby Parker’s latest earnings reinforce steady progress. Third-quarter revenue rose 15% year over year to $221.7 million, while net income swung to $5.9 million from a loss a year earlier. Adjusted EBITDA reached $25.7 million, lifting margins to 11.6%, and active customers grew more than 9% on a trailing 12-month basis.

Ultimately, insider selling under structured plans is not uncommon, but sustained upside hinges on whether Warby Parker can translate improving profitability and customer growth into returns that consistently outpace the market.

Glossary

Net sold: The total number of shares sold minus any shares bought during the same period.
Open-market transaction: A trade executed on a public exchange, not through private negotiation or company programs.
SEC Form 4: A regulatory filing disclosing insider trades of company securities by officers, directors, or major shareholders.
Weighted average price: The average price per share, weighted by the number of shares traded at each price.
Derivative securities: Financial instruments whose value is based on the price of an underlying asset, such as stock options.
Class A common stock: A specific class of company shares, often with distinct voting rights or privileges.
Direct holdings: Shares owned personally by an individual, not through trusts or other entities.
Indirect holdings: Shares owned through trusts, family members, or other entities, rather than directly.
Rule 10b5-1 trading plan: A prearranged plan allowing insiders to sell shares on a fixed schedule, reducing accusations of insider trading.
Insider sale capacity: The amount of company stock an insider still owns and could potentially sell.
Vertically integrated: A business model where a company controls multiple stages of its supply chain or production process.
TTM: The 12-month period ending with the most recent quarterly report.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends Warby Parker. The Motley Fool has a disclosure policy.