His purchase during a banking slump looks pretty smart today.
Jamie Dimon sure knows how to time a stock purchase. Maybe that’s why he’s the CEO of J.P. Morgan Chase.
Back on Feb. 11, Dimon bought about $26 million worth of his bank’s stock, or some 500,000 shares, the Wall Street Journal reported. At the time, J.P. Morgan jpm shares were down more than 20% on the year, and Dimon bought them because he believed they had been oversold in a larger stock market downturn, Bloomberg reported.
On the day Dimon bought his 500,000 shares, the stock closed at $53.07. The next day it rose more than 8%, to $57.81—the news that the CEO was making a purchase didn’t hurt—and shares haven’t really looked back since.
Amid a broad recovery in bank stocks, this Wednesday (Oct. 5), J.P. Morgan closed at $67.69, or 27.5.% above where it was eight months ago. That gives Dimon a paper profit of some $7.3 million, more or less.
And that’s not the only way Dimon is benefitting from the stock’s early 2016 slump, as Lucinda Shen wrote in Fortune in February. The CEO’s equity award for 2015 was supposed to be valued at $20.5 million.
Banks generally calculate the number of shares they award by dividing the total award value by the share price in the days before the award is given. According to calculations by Bloomberg, because Dimon’s award was given on Jan. 19, when J.P. Morgan shares had slipped to $57.01 in the middle of a slump in bank stocks, he received about 49,000 shares more than he would have gotten if the award had been calculated at the end of 2015, when shares closed at $66.03.