No, Rigetti Computing’s CEO Didn’t Sell His Stake. How a Rumor Slammed the Stock.

Shares of Rigetti Computing, one of the hottest names in quantum computing, have surged more than 100% this year. (Drew Bird Photography)

Key Points

• Rigetti Computing’s CEO, Subodh Kulkarni, holds an equity interest of 0.8% through 2.7 million stock options, with 1.6 million vested.
• Kulkarni exercised an option to acquire one million shares at $0.96 each in May, selling them for approximately $12 per share.
• Rigetti’s stock has surged 150% this year and 3,086% over the past twelve months, driven by market sentiment and future potential.

Shares of Rigetti Computing plunged nearly 15% a week ago after rumors circulated on social media that its chief executive had sold his entire stake in the quantum computing company.

In reality, CEO Subodh Kulkarni maintains an equity interest through stock options that would give him the right to buy 2.7 million shares. Roughly 1.6 million are vested, meaning Kulkarni has full ownership, and 1.1 million are unvested.

That is equivalent to a 0.8% stake in the company, which had 324.17 million shares outstanding on Thursday.

“My equity position reflects how deeply I’m invested, both personally and professionally, in Rigetti’s success,” Kulkarni told Barron’s. “The majority of my compensation is tied to long-term performance, and I have no plans to reduce my stake.”

It is true that Kulkarni exercised an option to acquire one million shares in late May. A Form 4 filed with the Securities and Exchange Commission on May 21 shows Kulkarni exercised an option to acquire the shares for 96 cents apiece the day prior, before selling them for around $12 each.

However, a look at Rigetti’s annual proxy statement filed April 25 shows the CEO has a chunk of compensation tied up in stock options. That has been the case since he joined the company in December 2022.

Kulkarni receives an annual base salary and is also eligible to receive “stock options, restricted stock, restricted stock units or other equity awards,” according to Rigetti’s proxy statement. Other filings indicate these options are subject to vesting schedules, which define when Kulkarni earns ownership and when he can exercise them.

Shares of Rigetti and its peers trade mostly on sentiment and potential. The bull case is that the nascent technology will reinvent entire sectors, from healthcare to financial services, in years to come. Offsetting that is the fact that the quantum-computing companies aren’t expected to achieve significant profits for years.

The stock has seen explosive gains, rising 150% this year and 3,086% over the past 12 months. A $10,000 investment in Rigetti last year would be worth more than $318,000 today.

The stock jumped on Thursday following a report that the Trump administration was in talks to take an equity stake in Rigetti and several of its quantum-computing peers. The Commerce Department ultimately denied the report.

Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com