Sezzle's Insiders' Timely Sale May Have Helped Mitigate 11% Dip in Share Price

Over the past year, insiders sold US$6.1m worth of Sezzle Inc. (NASDAQ:SEZL) stock at an average price of US$96.61 per share allowing them to get the most out of their money. The company's market valuation decreased by US$261m after the stock price dropped 11% over the past week, but insiders were spared from painful losses.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Sezzle

The Last 12 Months Of Insider Transactions At Sezzle

In the last twelve months, the biggest single sale by an insider was when the Co-Founder, Paul Paradis, sold US$440k worth of shares at a price of US$134 per share. That means that even when the share price was below the current price of US$385, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 1.9% of Paul Paradis's holding.

In the last year Sezzle insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Sezzle Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Sezzle shares. Specifically, insiders ditched US$2.3m 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 Sezzle

For a common shareholder, it is worth checking how many shares are held by company 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. It's great to see that Sezzle insiders own 42% of the company, worth about US$914m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Sezzle Tell Us?

Insiders sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. On the plus side, Sezzle makes money, and is growing profits. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Sezzle. Be aware that Sezzle is showing 3 warning signs in our investment analysis, and 2 of those don't sit too well with us...

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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.