Peter Lynch theorizes that “insiders might sell their shares for many reasons, but they buy for only one: they think the price will rise.” If that’s the case, then adding to an already existing position of company stock, should be considered as a positive development.
According to a filing with Securities and Exchange Commission released on Monday, Mel Karmazin - Chief Executive Officer of Sirius Satellite Radio (NASDAQ:SIRI) has purchased 2,000,000 shares of the common stock on the open market, with an average price of $1.3732 per share. Karmazin now holds some 8.5 million shares of direct stock ownership.
Karmazin’s purchase seems to have improved somewhat investor confidence. Monday, in after-hours trading, shares of the satellite radio company gained more than 7%, rising to $1.49.
Sirius shares have experienced a meltdown and have dropped from above $60 in fiscal 2000 to the current $1.49.