Multiple insiders at Immunovant, Inc. (NASDAQ:IMVT) have sold a significant amount of shares over the past year, which may raise concerns among investors. While it is generally more important to know if insiders are buying rather than selling, multiple insider sales over a specific duration should catch shareholders’ attention as a potential red flag.
Insider transactions are not the sole determinant of long-term investing decisions, but it is logical to pay attention to whether insiders are buying or selling shares. The biggest insider sale was carried out by Chief Development Officer, Julia Butchko, who sold $1.0 million worth of shares at an average price of $16.79 per share, below the current market price of $21.90. This suggests that Butchko was content with a lower valuation, which can be viewed as discouraging for shareholders.
However, it is important to note that the biggest single sale accounted for only 24% of Julia Butchko’s holding. Despite this, over the last year, insiders have sold 168.45k shares, while buying 35.00k shares worth $200k. The overall trend indicates more insider selling than buying.
Furthermore, there has been substantial insider selling in the last quarter, with insiders offloading $256k worth of Immunovant shares and no recorded purchases. This implies that some insiders may believe the shares are overvalued.
Insider ownership is also worth considering, as high insider ownership indicates management’s alignment with shareholder interests. In the case of Immunovant, insiders own 0.5% of the company, which amounts to approximately $14 million. While this level of insider ownership is not outstanding, it does indicate some alignment between management and smaller shareholders.
In conclusion, the insider transactions at Immunovant, particularly the selling activities, raise concerns among investors. Insiders have not bought any shares in the last three months, and there has been a consistent trend of insider selling. Additionally, it is advisable for investors to be aware of the risks facing Immunovant.