Executive Chairperson at Scilex Holding Acquires Company Stock Options Worth 200,000 Shares

Henry Ji, Executive Chairperson at Scilex Holding SCLX, reported a large acquisition of company stock options on October 6, according to a new SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Friday showed that Ji, Executive Chairperson at Scilex Holding, a company in the Health Care sector, was just awarded stock options worth 200,000 shares of SCLX. The options give Ji the right to buy the company's stock at $1.41 per share.

Scilex Holding shares are trading down 0.68% at $1.47 at the time of this writing on Friday morning. Since the current price is $1.47, this makes Ji's 200,000 shares worth $294,000.

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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 officer, director, or beneficial owner of more than ten percent of a company's equity securities registered under Section 12 of the Securities Exchange Act of 1934. 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 Scilex Holding's Insider Trades.

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