In this article, I will feature one tech stock that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:
- The stock was sold by three or more insiders within one month.
- The stock was not purchased by any insiders in the month of intensive selling.
- At least two sellers decreased their holdings by more than 10%.
LinkedIn Corporation (LNKD) operates an online professional network.
Insider selling during the last 30 days
Here is a table of LinkedIn's insider-trading activity during the last 30 days by insider.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Deep Nishar||SVP||Oct 7-Nov 5||46,557||Yes||81,990 shares||36.2%|
|David Henke||SVP||Oct 7-Nov 5||35,416||Yes||24,063 shares||59.5%|
|David Sze||Director||Oct 15-Nov 1||12,500||Yes||185,688 shares||6.3%|
|Erika Rottenberg||VP||Oct 9-23||8,000||Yes||63,454 shares + 27,725 options||8.1%|
|Jeff Weiner||CEO||Oct 7-Nov 5||111,000||Yes||181,835 shares + 1,212,911 options||7.4%|
|Reid Hoffman||Director||Oct 7-Nov 5||250,002||Yes||15,906,561 shares||1.5%|
|Michael Gamson||SVP||Oct 15||8,747||Yes||132,789 shares + 145,495 options||3.0%|
|James Scott||SVP||Oct 8||6,250||Yes||36,182 shares + 100,000 options||4.4%|
|Steve Sordello||CFO||Oct 9||5,000||Yes||58,424 shares + 5,000 options||7.3%|
There have been 483,472 shares sold by insiders during the last 30 days. More details about the Rule 10b5-1 trading plan can be found from this link.
Insider selling by calendar month
Here is a table of LinkedIn's insider-trading activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 3,901,412 shares sold and there have been zero shares purchased by insiders this year.
LinkedIn reported the third-quarter financial results on October 29 with the following highlights:
|Net loss||$3.4 million|
(Source: Earnings presentation)
LinkedIn's guidance is as follows:
|Revenue||$415-$420 million||~$1.5 billion|
|Adjusted EBITDA||$98-$100 million||~$364 million|
(Source: Earnings presentation)
LinkedIn has the highest P/S ratio among these three companies.
Here is a table of these competitors' insider-trading activities this year.
|Company||Insider buying / shares||Insider selling / shares|
Only LinkedIn has seen intensive insider selling during the past 30 days.
There have been nine different insiders selling LinkedIn and there have not been any insiders buying LinkedIn during the past 30 days. Two of these nine insiders decreased their holdings by more than 10%.
LinkedIn is trading at a P/E ratio of 994.50 and a forward P/E ratio of 99.45. LinkedIn has a book value of $21.22 per share.
LinkedIn has a $176 price target from the Point and Figure chart. I believe there is an opportunity for a short entry with the $176 price target. I would place a stop loss at $258, which is the all-time high. The four main reasons for the proposed short entry are high P/S ratio, high P/E ratio, bearish Point and Figure chart, and the intensive insider selling activity.
Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in LNKD over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.