Management of Technology Companies Continue Selling - Zillow (Z)

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.

Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week went up to 8.15. In other words, insiders sold more than 8 times as much stock as they purchased. The Sell/Buy ratio this week was unfavorable compared to the prior week when the ratio stood at 3.33.

Notable Insider Buys:

1. Avis Budget Group, Inc. CAR: $200.98

Executive Chairman Bernardo Hees acquired 28,334 shares of this car and truck rentals company, paying $172.78 per share for a total amount of $4.89 million. These shares were purchased indirectly through a trust.

P/E: 6.31 Forward P/E: 9.53 Industry P/E: 42.26 P/S: 0.94 Price/Book: N/A EV/EBITDA: 12.18 Market Cap: $9.7B Avg. Daily Volume: 1,054,339 52 Week Range: $65.87 – $545.11

2. The Beachbody Company, Inc. BODY: $2.16

Shares of this health and wellness platform were acquired by 2 insiders:

• Chairman of the Board, Chief Executive Officer Carl Daikeler acquired 1,789,200 shares, paying $1.75 per share for a total amount of $3.13 million. Mr. Daikeler increased his stake by 367.63% to 2,275,879 shares with this purchase.
• Director Michael Heller acquired 224,423 shares, paying $1.32 per share for a total amount of $297,093. Mr. Heller increased his stake by 5.43% to 4,357,866 shares with this purchase.

P/E: N/A Forward P/E: -7.45 Industry P/E: N/A P/S: 0.79 Price/Book: 2.11 EV/EBITDA: -4.02 Market Cap: $671.24M Avg. Daily Volume: 1,191,814 52 Week Range: $0.91 – $13.5

3. Newmark Group, Inc. NMRK: $11.29

Chairman Howard W. Lutnick acquired 277,000 shares of this commercial real estate services company, paying $10.83 per share for a total amount of $2.99 million. These shares were purchased indirectly through a trust.

P/E: 3.09 Forward P/E: 5.76 Industry P/E: N/A P/S: 0.84 Price/Book: 1.7 EV/EBITDA: 19.19 Market Cap: $2.58B Avg. Daily Volume: 1,610,601 52 Week Range: $10.14 – $19.1

4. Coinbase Global, Inc. COIN: $75.32

Director Frederick Ernest Ehrsam III acquired 30,030 shares of this cryptoeconomy focused broker, paying $60.60 per share for a total amount of $1.82 million. These shares were purchased indirectly through a trust.

P/E: 7.7 Forward P/E: -18.37 Industry P/E: 13.38 P/S: 2.74 Price/Book: 2.57 EV/EBITDA: 4.42 Market Cap: $19.73B Avg. Daily Volume: 9,122,877 52 Week Range: $40.83 – $368.9

5. BitNile Holdings, Inc. NILE: $0.36

Executive Chairman Milton C. Ault III acquired 5,042,500 shares of this bitcoin mining company, paying $0.31 per share for a total amount of $1.55 million. 5,000,000 of these shares were purchased indirectly by Ault Alpha LP.

P/E: N/A Forward P/E: -2.13 Industry P/E: 26.18 P/S: 1.57 Price/Book: 0.26 EV/EBITDA: -18.62 Market Cap: $113.15M Avg. Daily Volume: 37,055,626 52 Week Range: $0.23 – $3.7

Notable Insider Sales:

1. Arista Networks, Inc. ANET: $105.87

Shares of this networking company were sold by 3 insiders:

• Chief Development Officer Andreas Bechtolsheim sold 403,000 shares for $101.12, generating $40.75 million from the sale. These shares were sold indirectly through a trust. 3,000 of these shares were sold as a result of exercising options immediately prior to the sale.
• Chief Platform Officer John F. McCool sold 7,621 shares for $97.93, generating $746,330 from the sale. These shares were sold indirectly through a trust.
• Director Kelly Bodnar Battles sold 560 shares for $98.50, generating $55,159 from the sale.

P/E: 36.38 Forward P/E: 24.85 Industry P/E: 20.42 P/S: 10.3 Price/Book: 7.86 EV/EBITDA: 27.31 Market Cap: $32.53B Avg. Daily Volume: 1,956,115 52 Week Range: $82.94 – $148.57

2. Loews Corporation L: $65.93

Shares of this diversified holding company were sold by 2 insiders:

• Director Andrew H. Tisch sold 500,000 shares for $64.15, generating $32.08 million from the sale. These shares were sold indirectly by trusts.
• SVP & Chief Investment Officer Richard Waldo Scott sold 6,123 shares for $64.35, generating $394,015 from the sale. These shares were sold as a result of exercising options immediately prior to the sale.

P/E: 10.16 Forward P/E: 22.73 Industry P/E: 11.01 P/S: 1.12 Price/Book: 0.98 EV/EBITDA: 6.73 Market Cap: $16.23B Avg. Daily Volume: 948,098 52 Week Range: $51.35 – $68.2

3. Chubb Limited CB: $210.89

Shares of this insurance company were sold by 2 insiders:

• Chairman & CEO Evan G. Greenberg sold 62,410 shares for $208.44, generating $13.01 million from the sale. 14,400 of these shares were sold indirectly through various trusts.
• Director Michael G. Atieh sold 500 shares for $203.49, generating $101,745 from the sale.

P/E: 11.23 Forward P/E: 12.49 Industry P/E: 11.01 P/S: 2.2 Price/Book: 1.58 EV/EBITDA: 13.04 Market Cap: $89.36B Avg. Daily Volume: 1,753,169 52 Week Range: $155.78 – $218.99

4. Royalty Pharma plc RPRX: $41.27

Shares of this biotech company were sold by 3 insiders:

• Director Rory B. Riggs sold 150,000 shares for $39.42, generating $5.91 million from the sale.
• EVP, Investments & GC George W. Lloyd sold 100,000 shares for $40.27, generating $4.03 million from the sale.
• EVP & Chief Scientific Officer James F. Reddoch sold 75,000 shares for $40.44, generating $3.03 million from the sale. These shares were sold indirectly by Reddoch RPI LLC.

P/E: 30.15 Forward P/E: 12.21 Industry P/E: 24.25 P/S: 12.27 Price/Book: 3.11 EV/EBITDA: 18.38 Market Cap: $27.96B Avg. Daily Volume: 2,120,115 52 Week Range: $34.86 – $47.1

5. Matterport, Inc. MTTR: $5.67

Director Jason Krikorian sold 2,206,146 shares of this spatial data company for $5.32, generating $11.73 million from the sale. These shares were sold indirectly by DCM VI, L.P. Jason Krikorian.

P/E: N/A Forward P/E: -15.32 Industry P/E: 49.27 P/S: 14.18 Price/Book: 2.42 EV/EBITDA: -4.87 Market Cap: $1.6B Avg. Daily Volume: 7,321,207 52 Week Range: $3.94 – $37.6