Epam retrospective analysis makes a valuable lesson to how public company governance can make or destroy itself.
Back in 2014, when first Russian/Ukranian crisis broke off with Crimea annexation, CEO and management had made a decision to take advantage of such situation. With deliberate decision to exploit local currencies plunge, increase hiring velocity in corresponding locations, this risk-careless “management“ let grow head-counts 200% in next 7 years.
By the time the war began, this reckless decision pushed the entire company on the brink of collapse. The next 5 years was a total chaos with idle speed performance.
Overall the stock lost 80% of its face value, if to adjust to inflation-90%, if adjust to benchmark s&p 500 growth -97%
Tremendous amount of cash was burn out to ashes
Despite all of this clingy and quite o-l-d management for such industry, stays intact, holds all investors hostage of their willpower. The board Ceo Dobkin just serve his say.
He also blind sighted AI revolution being busy relocating people around the world and convincing everyone that we will be O.K.
Now the question is why investors keep suffering from such ego-centered, 66 yo CEO? They lost a lit of money, do they perf their fiduciary responsibility? Or maybe it is an invisible game against retail investor? What is the point of having idle speed performance public company being listed of NYSE acting as a private one?
Further forensics:
EPAM’s insider selling in **Sep–Dec 2021** deserves scrutiny: senior executives repeatedly sold at roughly **$600–710/share**, led by CEO/Chairman **Arkadiy Dobkin’s \~$34.5M sale of 50,000 shares on Dec. 8**, followed the next day by SVP **Viktar Dvorkin (\~$8.4M)** and **Lawrence Solomon (\~$4.8M)**; Dobkin had also sold another \~$13.5M in November. In total, EPAM insiders sold roughly **$143M during 2021 with no open-market purchases**, shortly before the Feb. 24, 2022 invasion and EPAM’s eventual collapse from the \~$690–700 area to roughly **$200 at the worst point** and \~$328 year-end. The potentially suspicious issue is not that management knew invasion was possible—U.S. warnings and geopolitical risk were public—but that they had **deep, company-specific knowledge of EPAM’s enormous Russia/Ukraine/Belarus exposure**, which had expanded dramatically since 2014, and may have understood the *scale of the operational/financial damage* an invasion would cause well before the market did.
**The legal question is not whether they knew an invasion was possible—that risk was public—but whether, at the time of the sales, they possessed material nonpublic information concerning the likely magnitude and financial consequences for EPAM of an invasion and traded while aware of it.** If the sales were prearranged before possession of such information, they may be lawful; if insiders **materially changed, accelerated, or initiated discretionary sales because of nonpublic company-specific information**, that could support an insider-trading theory. The critical evidence is therefore the **decision/plan-adoption date and the information available to each insider at that point**, not merely the fact that the invasion subsequently occurred.