Notable Elastic Insider Trades $1.2M In Company Stock

Jonathan Chadwick, Director at Elastic ESTC, made a large buy and sell of company shares on October 27, according to a new SEC filing.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission states that Jonathan Chadwick exercised options to purchase 6,250 Elastic shares at a price of $19.87 per share for a total of $124,188 on October 27. They then sold their shares on the same day in the open market. They sold at prices ranging from $166.92 to $174.14 to raise a total of $1,057,755 from the stock sale.

Following the transaction, Chadwick still owns 5,102 shares of the company, worth $888,079.

Elastic shares are trading up 0.32% at $174.06 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, 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.

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 Elastic's Insider Trades.