Insider Sellers Might Regret Selling Rivian Automotive Shares at a Lower Price Than Current Market Value

Rivian Automotive, Inc.'s (NASDAQ:RIVN) stock price has dropped 18% in the previous week, but insiders who sold US$1.5m in stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of US$13.83 is still lower than the current share price.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Rivian Automotive

The Last 12 Months Of Insider Transactions At Rivian Automotive

Over the last year, we can see that the biggest insider sale was by the Chief Accounting Officer, Jeffrey Baker, for US$453k worth of shares, at about US$14.70 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$8.71. So it may not tell us anything about how insiders feel about the current share price.

Rivian Automotive insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insiders At Rivian Automotive Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Rivian Automotive. In total, insiders dumped US$670k 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.

Does Rivian Automotive Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Rivian Automotive insiders own about US$95m worth of shares. That equates to 1.2% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Rivian Automotive Insider Transactions Indicate?

Insiders sold Rivian Automotive shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Rivian Automotive. To assist with this, we've discovered 4 warning signs that you should run your eye over to get a better picture of Rivian Automotive.

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For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.