On any given business day, there can be a significant volume of insider trading activity. While all insider transactions carry some level of importance, some are undoubtedly more noteworthy than others.
From the retail investor’s perspective, there are several factors that make an insider trade extra special. One is the sheer size of the trade. High dollar value transactions carry more weight in the market because they have the potential to significantly move a stock’s price.
Another differentiator is simply who placed the trade. Company founders, CEOs, or other high-ranking executives are considered more buzzworthy traders. Board members or influential institutional shareholders that control a large portion of outstanding shares can also cause a stir.
By virtue of amount and/or an ownership stake, there have recently been several big splashes that current and prospective shareholders should make note of. These are three of the biggest.
Why Does Google Have Different Share Classes?
Formerly known as Google, Alphabet (NASDAQ:GOOG) has three share classes. Class A shares, which trade under the ‘GOOGL’ symbol come with voting rights. One class A share represents one vote in any corporate matters involving shareholders.
Then there are class B shares, which are exclusively held by Google co-founders Larry Page and Sergey Brin and carry 10-times the voting power of class A shares. These shares do not trade in the public market. The third type, Class C shares, trade under the ‘GOOG’ symbol and do not carry voting rights.
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Why the alphabet soup of share classes at Alphabet? The multilayered share structure is designed to ensure that the company’s founders maintain voting control. Since some classes come without votes and the founders’ class B shares come with enhanced voting rights, the disparity allows Mr. Page and Mr. Brin to have a stranglehold on important decisions.
Aside from owning the powerful class B shares, Alphabet’s founders also own huge amounts of class C shares. They also can also convert their class B shares into Class A shares. The pair is frequently involved with various conversion and selling activities designed to assert their voting authority and diversify their personal assets.
In the past week, Mr. Brin has been busy shuffling around his Alphabet ownership and in the process impacting the stock’s price movement. On three occasions he converted class B shares into Class A shares and immediately sold the class A shares. This was followed by a $38.3 million sale of class C shares on October 15th. In total the four-day selling spree totaled over $153 million.
These were significant insider sales even considering the $2.6 trillion combined market value of the two publicly traded share classes. Still, to put in perspective just how much equity Alphabet’s founder's control, Mr. Brin alone still holds more than 18.9 million class B shares worth approximately $53.5 billion. Roughly 350 of the S&P 500 companies are each worthless.
Are Insiders Buying DigitalBridge Group?
DigitalBridge Group (NYSE:DBRG) is a private equity firm focused on digital infrastructure assets. It invests in, builds, and operates more than $35 billion worth of data centers, macro cell towers, fiber networks, small cells, and edge infrastructure globally. With 23 such diversified companies in its portfolio, DigitalBridge represents a unique way to invest in the digital economy theme.
That goes for not only retail investors but insiders as well. California-based real estate company Landmark Infrastructure Partners, a major DigitalBridge shareholder, reiterated its interest in a big way last week. It upped its DigitalBridge position by nearly 700,000 shares buying at prices ranging from $16.42 to $16.50. The $7.4 million buy came on the heels of a $3.7 million buy that was executed the week prior.
In total, insiders own nearly 10% of DigitalBridge. Like other real estate investment trusts (REITs) the stock has rebounded nicely off its pandemic low. Based on the growth potential of the digital infrastructure space and a big vote of confidence from an institutional shareholder, the rally may have only just begun.
Are Insiders Buying the Agile Therapeutics Dip?
It’s been a tough year for Agile Therapeutics (NASDAQ:AGRX) shareholders. After a strong start to the year, the women’s healthcare company has seen its stock price slip in each of the last seven months. There is at least one insider who thinks the selloff is overdone.
Manhattan-based life sciences hedge fund Perceptive Advisors recently disclosed a $4.8 million purchase of Agile Therapeutics stock. The buy occurred on October 13th at a price of $0.85 per share. The deal came with approximately 2.7 million warrant securities, which represent the right to buy additional shares.
In addition to the warrants, Perceptive Advisors now owns more than 21.6 million common shares. This insider trade falls under the big splash category not only because of its dollar amount but because the hedge fund increased its existing position by 36% at the time when the stock was trading near an all-time low.
It remains to be seen if Agile Therapeutics management can right the ship. However, between an optimistic insider and bullish sentiment from Wall Street analysts, this high-risk micro-cap stock may be worth a closer look.
Companies in This Article:
| Company | Current Price | Price Change | Dividend Yield | P/E Ratio | Consensus Rating | Consensus Price Target |
|---|
| Alphabet (GOOG) | $170.68 | -1.1% | 0.47% | 22.64 | Moderate Buy | $200.56 |
| DigitalBridge Group (DBRG) | $12.57 | -6.3% | 0.32% | 5.90 | Buy | $19.22 |
| Agile Therapeutics (AGRX) | $1.51 | flat | N/A | -0.41 | Hold | N/A |
