In a week where we saw most market indices rebound sharply, insiders scaled back their buying after three weeks of elevated buying. Buying declined by 64% in absolute dollar terms and 26% in terms of the number of companies that saw insider buying. I have been monitoring a select group of technology growth companies to see at what point insiders of these companies might stop selling and start buying instead. Despite the huge declines in their stock, insiders continue to sell. This does not give me a lot of confidence that the rally we saw last week marked the end of the bear market but feels more like a bear market rally from temporarily oversold conditions. Obviously there is no way to know for sure and we will find out if that is indeed the case in the coming months. I was looking into Zillow (Z) recently and was surprised by just how many members of the management team continued selling the stock and in many cases below their recent option exercise prices as I tweeted out on Friday.
Last week we also saw 7 different insiders of DoorDash (DASH) including the CFO and General Counsel sell stock, the Global Head of Hosting at AirBnB (ABNB) sold stock and the EVP of Global Sales at Paypal (PYPL) sold shares earlier this month. It also looked like multiple insiders of Palantir (PLTR) sold shares last week but in their case most of those sales were related to the vesting of RSUs and the taxes due related to that vesting. When looking at form 4 filings, reading the footnotes of the filings as discussed in our Deconstructing Form 4 Filings article, helps you understand the nature of purchases or sales.
We also saw insider buying by the CEOs of SoFi Technologies (SOFI), Uber (UBER) and Paypal (PYPL). Several funds and institutions that were involved with some of these growth companies before their IPOs have also purchased shares in recent months including the VC firm Sequoia purchasing shares of DoorDash in March, Sequoia’s India fund purchasing shares of Freshworks (FRSH) in March and Singapore’s Sovereign wealth fund purchasing shares of Affirm (AFRM) in April.
Welcome to edition 621 of Insider Weekends. Insider buying decreased last week with insiders purchasing $115.85 million of stock compared to $324.11 million in the week prior. Selling also declined to $944.38 million compared to $1.08 billion in the week prior.