The appointment of a new CEO at a company often results in a shakeup of the management team and we are seeing this play out Hasbro (HAS) with the appointment of a new CFO and a new President as discussed below. We also often see new insiders purchase stock in what I call a “signal purchase” where they are attempting to signal their confidence in the company to the market.
In some strange situations, there is actually a stipulation in the employment agreement that the insider is required to buy a certain amount of stock in order to get a grant of additional shares. We saw this when William Ready was appointed as the CEO of Pinterest (PINS) last year and purchased $5 million worth of stock.