TransDigm Executive Sells Approximately $31.5 Million in Stock Under Pre-Filed 10b5-1 Plan

Large Option Exercise and Equity Sale Realize Approximately $25 Million Gain

Kevin M. Stein, a key executive at TransDigm Group Inc. (TDG), executed a major stock option exercise and common‐stock sale on January 8, 2026, realizing substantial cash proceeds. According to the Form 4 filed with the U.S. Securities and Exchange Commission (SEC), Stein: - Exercised 17,373 options at \$342.31 per share—incurring approximately \$6 million in cost—to acquire common shares. - Sold 22,373 shares in the open market at \$1,405.30–\$1,413.17 per share, generating roughly \$31.5 million in gross proceeds.

After accounting for option exercise costs, the transaction yielded an estimated profit of about $25 million.

Transaction Structure and Remaining Stake: Significant Cash‐Out, Yet Substantial Holdings Remain

The trade was executed through “FORTUNA TRUST,” established on June 1, 2018, which holds Stein’s indirect equity. Although he sold more shares (22,373) than were acquired via exercise (17,373), creating a net reduction, Stein still maintains an indirect position of around 50,000 shares (including derivatives). At current market prices, this remaining stake is valued at over $80 million—indicating that, despite the large cash‐out, his long-term commitment to the company appears intact.

**Transaction Summary** - Option Exercise: 17,373 shares × \$342.31 ≈ \$6.0 million cost - Common Stock Sale: 22,373 shares at \$1,405.30–\$1,413.17 ≈ \$31.5 million proceeds - Estimated Remaining Indirect Stake Value: >\$80 million

Sale Foreshadowed by 2025 Form 144: Execution of a 10b5-1 Plan Is Key

This large‐scale sale followed a pre-announced plan. On June 2, 2025, FORTUNA TRUST filed a Form 144 declaring its intention to begin selling up to 17,373 TransDigm shares on January 8, 2026, under a Rule 10b5-1 trading arrangement managed by Morgan Stanley Smith Barney LLC Executive Financial Services. The initial plan targeted about $24.1 million in sales; the final transaction exceeded that amount by including additional sales post-exercise.

Investor View: Realizing Gains vs. Assessing Fundamental Signals

Headlines about sizable insider sales can weigh on near-term investor sentiment. Profit realization above the $1,400 level may heighten valuation concerns for some shareholders. However, given the sale’s adherence to a pre-disclosed 10b5-1 plan and Stein’s remaining stake valued at over $80 million, interpreting the transaction as a negative signal on TransDigm’s fundamentals requires caution. Investors should reassess the company’s upcoming earnings, defense and aerospace cycle outlook, and capital allocation strategy to determine whether this move reflects structured liquidity management or management’s view on current valuation—an interpretation likely to influence future stock performance.