Insiders Sold US$1.6m Of Butterfly Network Stock Possibly Sending Warning Sign

Butterfly Network, Inc.'s (NYSE:BFLY) stock rose 15% last week, but insiders who sold US$1.6m worth of stock over the last year are probably in a more advantageous position. Selling at an average price of US$2.61, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Butterfly Network

The CEO, President & Chairman of the Board, Joseph DeVivo, made the biggest insider sale in the last 12 months. That single transaction was for US$781k worth of shares at a price of US$2.44 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$1.59). So it may not tell us anything about how insiders feel about the current share price.

Insiders in Butterfly Network didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Butterfly Network

I will like Butterfly Network better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Are Butterfly Network Insiders Buying Or Selling?

In the last quarter insider Nicholas Caezza sold US$4.5k worth of equity. That's not a lot. Looking at the net result, we don't think this recent trading sheds much light on how insiders, as a group, are feeling about the company's prospects.

Does Butterfly Network Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Butterfly Network insiders own about US$72m worth of shares. That equates to 19% 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 Does This Data Suggest About Butterfly Network Insiders?

While there has not been any insider buying in the last three months, there has been selling. But given the selling was modest, we're not worried. We're a little cautious about the insider selling at Butterfly Network. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Butterfly Network. You'd be interested to know, that we found 2 warning signs for Butterfly Network and we suggest you have a look.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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.