Eledon Pharma Board Member Awarded $345K Worth of Stock Options

John McBride, Board Member at Eledon Pharma ELDN, reported a large acquisition of company stock options on May 2, according to a new SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Tuesday showed that McBride, Board Member at Eledon Pharma, a company in the Health Care sector, was just awarded stock options worth 150,437 shares of ELDN. The options give McBride the right to buy the company's stock at $2.3 per share.

Eledon Pharma shares are trading up 4.87% at $2.3 at the time of this writing on Wednesday morning. Since the current price is $2.3, this makes McBride's 150,437 shares worth $345,508.

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Why Insider Transactions Are Important

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 Eledon Pharma's Insider Trades.

This article was generated by Benzinga's automated content engine and reviewed by an editor.