Meta Platforms Insiders Sell US$15m Of Stock, Possibly Signalling Caution

The fact that multiple Meta Platforms, Inc. (NASDAQ:META) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

The Last 12 Months Of Insider Transactions At Meta Platforms

The Chief Technology Officer, Andrew Bosworth, made the biggest insider sale in the last 12 months. That single transaction was for US$3.8m worth of shares at a price of US$473 each. So we know that an insider sold shares at around the present share price of US$452. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Meta Platforms insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year.

I will like Meta Platforms better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Meta Platforms Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Meta Platforms. In total, Chief Technology Officer Andrew Bosworth sold US$3.8m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership Of Meta Platforms

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Meta Platforms insiders own 14% of the company, currently worth about US$157b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The Meta Platforms Insider Transactions Indicate?

An insider sold Meta Platforms shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, Meta Platforms makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Meta Platforms. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Meta Platforms.