General Counsel Of Digitalocean Holdings Sold $5.60 Million In Stock

Alan Shapiro, General Counsel at Digitalocean Holdings DOCN, made a large insider sell on September 23, according to a new SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Thursday showed that Shapiro sold 64,451 shares of Digitalocean Holdings at a price of $86.84. The total transaction amounted to $5,596,925.

Following the transaction, Shapiro still owns 139,418 shares of Digitalocean Holdings worth $11,309,588.

Digitalocean Holdings shares are trading down 2.0% at $81.12 at the time of this writing on Monday morning.

The Importance of Insider Transactions

Insider transactions shouldn't be used primarily to make an investing decision, however an insider transaction can be an important factor in the investing decision.

In legal terms, an "insider" refers to any shareholder who owns at least 10% of a company. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

Transaction Codes To Focus On

Investors prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates the insider may have been forced to sell shares in order to receive compensation that had been promised upon being hired by the company.

Check Out The Full List Of Digitalocean Holdings's Insider Trades.