President at Design Therapeutics Acquires Company Stock Options Worth 2,100,000 Shares

Pratik Shah, President at Design Therapeutics DSGN, reported a large acquisition of company stock options on September 5, according to a new SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Tuesday showed that Shah, President at Design Therapeutics, a company in the Health Care sector, was just awarded stock options worth 2,100,000 shares of DSGN. The options give Shah the right to buy the company's stock at $2.48 per share.

Design Therapeutics shares are trading up 0.79% at $2.58 at the time of this writing on Wednesday morning. Since the current price is $2.58, this makes Shah's 2,100,000 shares worth $5,418,210.

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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.

Important Transaction Codes

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 Design Therapeutics's Insider Trades.

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