We are very excited to introduce two new features on Inside Arbitrage this week. Our symbol metrics page, which includes information about insider transactions and buybacks, now includes a price chart with insider purchases overlayed on it as you can see here for the energy company Continental Resources (CLR).
Rolling your mouse over a purchase displays, which insider purchased shares, at what price and the performance of the stock since that purchase as you can see below.
In keeping with our commitment to deliver more value to premium members through new tools and analysis while holding the price of the premium service the same for over four years, we are rolling out a new screen called Spinsider. The Spinsider screen automatically identifies management insider buying in companies that were spun out of a parent. The screen can also be used to find parent companies with insider buying and can be modified to include insider purchases by 10% owners and Directors. This screen was modeled after our Double Dipper screen that identifies a list of companies that are buying back their shares while their insiders are independently buying stock on the open market for their own portfolios.
The top company on the Spinsider screen, Warner Bros. Discovery (WBD) was created through a Reverse Morris Trust transaction when AT&T spun-off its WarnerMedia division and merged it with Discovery. The Reverse Morris Trust structure is used to allow for a tax-free spinoff and was also used by Pfizer (PFE) when it spun-off its generic drugs division Upjohn and merged it with Mylan to create Viatris (VTRS). As is often the case with stock spin-offs, Warner Bros. Discovery was down nearly 27% after the spin-off. Four different insiders of the company purchased shares on the open market, including the CEO and CFO, as discussed below.
In a month where we experienced the worst monthly drop in the Nasdaq since 2008 and where the big tech companies that were holding up the indexes also dropped, insiders stepped up as we expected to buy a significant amount of stock last week. Insiders purchased 11 times more stock last week than they purchased in the week prior. The $463 million of purchases were also significantly above the $6 million of purchases we saw during the same week in April 2021 and $15 million of purchases during the last week of April 2020.