While those sales may have stalled Googles appreciation somewhat, had you sold your Google stock in January 2010 expecting it to crash, you would have missed that 30% rise.
When a stock has run up quite a bit, an insider may feel its prudent to take some profits. In such cases, its even common to see the stock trade higher for awhile. Nobody, not even the CEO of a company, can predict the exact top or bottom of a stock advance with absolute certainty.
So, looking at the Google insider trades, the sales were scheduled r in advance, have to-date been performed over a dozen successive quarters and at a wide range of prices. In essence, during this three-year period, this selling has been the norm rather than the exception and is, therefore, not really notable.
Google co-founders Larry Page and Sergey Brin plan to steadily sell off up to 10 million shares of stock over the next five years,Online Education. according to an SEC filing.
But how do we decipher the insignificant from the more significant insider selling? Here are several clues that the selling can probably be ignored:
RSS About Us Press Center Resources Advisory Services Free Newsletter Free Reports Sitemap Contact Us Advertise With Us Employment Terms and Conditions Disclosures and Disclaimers Media Sites
Its often said insider selling can be a tip-off that insiders know their stock is about to underperform the market. While thats sometimes true, its also true that quite often insiders sell for personal financial reasons that have absolutely nothing to do with bad times ahead for their company.
That announcement came out in January, 2010. However, over the past three years, GOOG has risen from about $550 to its current price of $717. A 30% gain in three years is decent, if not Earth-shattering. Other notable tech stocks, such as Apple (NASDAQ:AAPL) up 128% and even IBM (NYSE:IBM) up 50%, have outperformed Google during the same time frame.
If only one corporate insider is selling,Free legal information. its less likely to be significant because it may just mean that one person has a particular need for revenue at that time.
Automatic sales are insignificant because theyre scheduled at intervals established r in advance and are simply done to generate income for the insider over time.
Few things are more anxiety-producing than hearing that company insiders of your vorite stock are about to sell off large numbers of shares. The stock may be cruising along, delivering images of that trip to Hawaii or 40-foot boat youve always wanted. Then suddenly, you hear an announcement like this:
Its also an axiom of the stock market that while insider selling is often insignificant becausestock prices of google Insider Selling When Is It a Warning it can be done for any number of reasons, insider buying almost always indicates that the corporate officers have reason to believe better times are ahead. Therefore, insider buying is usually much more important than insider selling.
These days its also common for companies to pay smaller salaries to company insiders and compensate them instead with stock shares and options. Keep this in mind, because often an insider could be selling shares simply to raise some personal capital.
So, when insiders at a large publicly traded company begin to sell off a large amount of stock, how do shareholders know if they should rush for the exits? Lets take a look at the nuances that dictate whether inside sales are cause for alarm.
