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Dustin Moskovitz Purchases Asana Through an Established Trading Plan – Insider Weekends

  • July 2, 2023

The last time we discussed insider purchases at Asana (ASAN) was in September of last year when billionaire founder and CEO Dustin Moskovitz purchased shares of the project management software company. His purchase was related to a secondary offering by the money losing company. I wrote the following about the company in September 2022:

About a year ago, Mr. Moskovitz was actively purchasing shares of Asana at prices sometimes approaching $100 per share. Despite the nearly 34% gain in the stock during the last five days after the company released earnings that beat expectations, the stock is still down 75% over the last year as the company continues to post losses and growth decelerates.

Unlike certain SaaS companies that post net losses but are cash flow positive, Asana is posting negative cash flows having burnt through $164 million in cash during the trailing twelve months. At this rate, the company would have been out of cash in a year. This cash from the private placement allows the company to extend its runway as it continues to prioritize revenue growth over bottom line profitability.

I wrote the following about the company in June 2021 after a series of insider purchases by Mr. Moskovitz.

Dustin Moskovitz is one of the co-founders of Facebook, making him the youngest self-made billionaire in history in 2011.  He co-founded the productivity software company, Asana, in 2008 and the company went public through a direct listing on September 30, 2020. The “reference price” for the direct listing was $21 and it closed its first day of trading at $28.80. It has more than doubled from that first day close to $62.73.

While it is unusual for insiders of a newly public company to buy shares as we highlighted with the Bumble purchases, it is even more unusual to see an insider buy shares multiple times though a defined trading plan (a 10b5-1 plan) as we have seen with Mr. Moskovitz since June 2021. The stock is already up more than $20 a share since he started buying shares. Asana’s market cap is a little over $10 billion and Mr. Moskovitz’s net worth is estimated to be over $21 billion.

There are many productivity software companies out there including Monday.com, Smartsheet (SMAR) and Atlassian (TEAM). I was an early adopter of Smartsheet (before Office 365 made Excel online a viable competitor), have held Atlassian shares for several years and nearly two decades ago wrote most of the code for an online project management module in an enterprise software application that is still in use. The barriers to entry appear low from the outside but the highly competitive nature of this industry makes it difficult for new entrants to gain enough traction to unseat incumbents unless the product is sufficiently unique or there is a lot of capital backing the company.

This Twitter thread by the CEO of a company that was an Asana competitor provides a fascinating inside look into just how competitive this little area of the software industry can be. The thread is long but the screenshot below is the money shot as it relates to Asana and Mr. Moskovitz.

Given the nature of this little niche and Asana’s valuation (31 times estimated 2021 sales), I would prefer to watch how the Asana story unfolds from the sidelines despite Mr. Moskovitz’s enthusiasm for the stock.

Andrew Wilkinson's Asana Thread

Asana’s valuation has come down to earth since I wrote that article last year and the stock now trades at 9.55 forward sales instead of the 31 times sales it was trading at last year. I still can’t muster enough enthusiasm for the stock as there are several other high growth technology companies that have dropped to valuations that make them look attractive at current levels including our portfolio companies Twilio (TWLO) and Coursera (COUR). I’ll continue to monitor Asana to see if the company can become a true platform company and if the market offers it at more attractive levels.

The stock continued to trend lower since that September 2022 secondary offering and finally bottomed below $12 in January of this year. Just like other tech companies, Asana’s stock has seen a big rebound this year, up more than 66% year-to-date. Mr. Moskovitz once again started buying stock last month under an established 10b5-1 trading plan.

Asana Dustin Moskovitz Insider Purchases June 2023

Looking at the company’s financial statements, it is disappointing to see that the company remains free cash flow negative over the last eight quarters. Moving over from the cash flow statement to the balance sheet, the picture improves a little as the company has $477 million in net cash on the balance sheet, not accounting for capital leases. Because software contracts are usually inked for multiple months or multiple years, it is also encouraging to see that the unearned revenue line in the current liabilities section of the balance sheet is growing at a steady rate. Think of this as the contracted pipeline of the company.

The income statement shows that efficiencies of scale are starting to kick in as the net loss has shrunk in each of the last three quarters, driven by a combination of revenue growth and declining SG&A expenses. The company’s gross margin also eclipsed 90% in each of the last two quarters.

The moderation in spending combined with a challenging environment for technology companies before the AI related bubble ignited, has translated into a decline in the revenue growth rate for Asana, dropping from a growth rate of over 57% in April 2022 to just 26% last quarter. The company’s valuation has also similarly come down and it now trades at 7 times forward sales.

While Asana didn’t look attractive to me when I discussed it in June 2021 or September 2022, I am starting to warm up to the company now. If the company can continue at its current trajectory and achieve profitability by next year without losing all its revenue growth momentum, I would be interested in exploring a potential long position.

Welcome to edition 688 of Insider Weekends. Insider buying increased significantly last week with insiders purchasing $61.7 million of stock compared to $24.04 million in the week prior. Selling on the other hand declined to $1.52 billion compared to $1.8 billion in the week prior.

Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by the total insider purchases that week. The adjusted ratio for last week dropped to 24.56. In other words, insiders sold almost 25 times as much stock as they purchased. This week, the Sell/Buy ratio was favorable, compared to the prior week when the ratio stood at 74.99.

Notable Insider Buys:

1. Asana, Inc. (ASAN): $22.04

President, CEO, & Chair Dustin A. Moskovitz acquired 320,000 shares of this work management platform, paying $22.55 per share for a total amount of $7.21 million. Mr. Moskovitz increased his stake by 0.81% to 39,912,803 shares with this purchase.

You can view the list of recent insider transactions for Asana, Inc. here.

P/E: N/AForward P/E: -68.88Industry P/E: 25.60
P/S: 8.25Price/Book: 13.72EV/EBITDA: -13.1
Market Cap: $4.78BAvg. Daily Volume: 2,312,77552 Week Range: $11.32 – $29.51

2. Axon Enterprise, Inc. (AXON): $195.12

Director Hadi Partovi acquired 25,000 shares of this defense weapons and body camera company, paying $191.10 per share for a total amount of $4.78 million. Mr. Partovi increased his stake by 6.43% to 413,817 shares with this purchase.

You can view the list of recent insider transactions for Axon Enterprise, Inc. here.

P/E: 103.79Forward P/E: 52.74Industry P/E: 19.65
P/S: 11.29Price/Book: 10.27EV/EBITDA: 113.57
Market Cap: $14.42BAvg. Daily Volume: 1,159,92252 Week Range: $88.61 – $229.95

3. Royalty Pharma plc (RPRX): $30.74

CEO, Chairman of the Board Pablo G. Legorreta acquired 130,000 shares of this pharma and biotech royalty company, paying $29.51 per share for a total amount of $3.84 million. These shares were purchased indirectly through a trust.

You can view the list of recent insider transactions for Royalty Pharma plc here.

P/E: 42.11Forward P/E: 7.8Industry P/E: 29.24
P/S: 5.84Price/Book: 2.31EV/EBITDA: 18.82
Market Cap: $13.78BAvg. Daily Volume: 2,254,03852 Week Range: $29.2 – $44.66

4. ONEOK, Inc. (OKE): $61.72

Shares of this natural gas and natural gas liquids company were acquired by 2 insiders:

  • President & CEO Pierce Norton acquired 24,607 shares, paying $60.96 per share for a total amount of $1.5 million. Mr. Norton increased his stake by 141.34% to 42,017 shares with this purchase.
  • Director Brian L. Derksen acquired 4,900 shares, paying $59.59 per share for a total amount of $291,989. Mr. Derksen increased his stake by 35.51% to 18,700 shares with this purchase.

You can view the list of recent insider transactions for ONEOK, Inc. here.

P/E: 11.45Forward P/E: 12.75Industry P/E: 7.16
P/S: 1.29Price/Book: 3.87EV/EBITDA: 9.5
Market Cap: $27.62BAvg. Daily Volume: 3,136,21652 Week Range: $50.5 – $71.57

5. MiMedx Group, Inc. (MDXG): $6.61

Chief Executive Officer Joseph H. Capper acquired 100,000 shares of this biotech company, paying $6.40 per share for a total amount of $640,434.

You can view the list of recent insider transactions for MiMedx Group, Inc. here.

P/E: N/AForward P/E: 33.05Industry P/E: 29.24
P/S: 2.72Price/Book: N/AEV/EBITDA: -54.42
Market Cap: $764.12MAvg. Daily Volume: 771,13352 Week Range: $2.43 – $6.8

You can view the full list of purchases from this Insider Buying page.

Notable Insider Sales:

1. Walmart Inc. (WMT): $157.18

Shares of Walmart were sold by 3 insiders:

  • Director Robson S. Walton sold 4,789,555 shares for $154.62, generating $740.58 million from the sale. These shares were sold indirectly by a trust.
  • Executive Vice President John D. Rainey sold 8,526 shares for $155.00, generating $1.32 million from the sale.
  • Executive Vice President John R. Furner sold 4,375 shares for $154.73, generating $676,944 from the sale.

You can view the list of recent insider transactions for Walmart Inc. here.

P/E: 37.78Forward P/E: 22.85Industry P/E: 22.78
P/S: 0.68Price/Book: 5.85EV/EBITDA: 13.09
Market Cap: $423.26BAvg. Daily Volume: 5,906,68752 Week Range: $120.06 – $158.23

2. Airbnb, Inc. (ABNB): $128.16

Shares of Airbnb were sold by 2 insiders:

  • Director Joseph Gebbia sold 516,667 shares for $124.65, generating $64.4 million from the sale. These shares were sold indirectly by a trust.
  • Chief Technology Officer Aristotle N. Balogh sold 5,500 shares for $123.71, generating $680,378 from the sale.

You can view the list of recent insider transactions for Airbnb, Inc. here.

P/E: 41.08Forward P/E: 31.72Industry P/E: 16.67
P/S: 9.28Price/Book: 15.26EV/EBITDA: 37.42
Market Cap: $80.77BAvg. Daily Volume: 6,540,44352 Week Range: $81.91 – $144.63

3. Vertiv Holdings Co (VRT): $24.77

Managing Director, E+I Philip O’Doherty sold 2,054,030 shares of this electrical equipment & parts company for $24.02, generating $49.34 million from the sale. These shares were sold indirectly by Powerbar Limited, an entity controlled by the reporting person.

You can view the list of recent insider transactions for Vertiv Holdings Co here.

P/E: 77.41Forward P/E: 16.4Industry P/E: 19.65
P/S: 1.55Price/Book: 6.06EV/EBITDA: 16.78
Market Cap: $9.41BAvg. Daily Volume: 5,086,02052 Week Range: $7.76 – $25.01

4. CoStar Group, Inc. (CSGP): $89

Shares of this provider of business services to the commercial real estate industry were sold by 4 insiders:

  • Chief Technology Officer Frank Simuro sold 92,300 shares for $89.65, generating $8.27 million from the sale.
  • Senior VP, Global Research Lisa Ruggles sold 30,474 shares for $91.42, generating $2.79 million from the sale.
  • Chief Financial Officer Scott T. Wheeler sold 21,530 shares for $89.30, generating $1.92 million from the sale.
  • Director John W. Hill sold 1,500 shares for $86.57, generating $129,855 from the sale.

You can view the list of recent insider transactions for CoStar Group, Inc. here.

P/E: 94.68Forward P/E: 58.94Industry P/E: 19.65
P/S: 16.15Price/Book: 5.21EV/EBITDA: 61.83
Market Cap: $36.36BAvg. Daily Volume: 2,691,68752 Week Range: $57.54 – $92.36

5. Atlassian Corporation (TEAM): $167.81

Co-CEO, Co-Founder Michael Cannon-Brookes sold 41,205 shares of this software application company for $162.69, generating $6,703,841 from the sale. These shares were sold indirectly by a trust.

You can view the list of recent insider transactions for Atlassian Corporation here.

P/E: N/AForward P/E: 77.69Industry P/E: 25.60
P/S: 12.85Price/Book: 74.15EV/EBITDA: -88.38
Market Cap: $43.13BAvg. Daily Volume: 2,038,59552 Week Range: $113.855 – $300.29

You can view the full list of sales from this Insider Sales page.

The list of all insider purchases and sales by management people is only available to InsideArbitrage Premium and Plus members.

Disclaimer:  Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.