Notable Zoom Video Communications Insider Trades $1.8M In Company Stock

Velchamy Sankarlingam, President. Engineering And Product at Zoom Video Communications ZM, made a large buy and sell of company shares on October 12, according to a new SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission states that Velchamy Sankarlingam exercised options to purchase 6,327 Zoom Video Communications shares for $0 on October 12. They then sold their shares on multiple transactions in the open market. They sold at prices ranging from $255.27 to $380.66 to raise a total of $1,814,450 from the stock sale.

Sankarlingam still owns a total of 6,075 shares of Zoom Video Communications worth, $1,587,465.

Zoom Video Communications shares are trading up 2.28% at $261.31 at the time of this writing on Wednesday morning.

The Importance of Insider Transactions

Insider transactions shouldn't be used primarily to make an investing decision, however, they can be an important factor for an investor to consider.

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 Zoom Video Communications's Insider Trades.