Numerous Butterfly Network Insiders Sold Stock: Not A Positive Omen

Butterfly Network, Inc. (NYSE:BFLY) shareholders might have a reason to worry after multiple insiders sold their shares over the last year. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Butterfly Network

Butterfly Network Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by CEO, President & Chairman of the Board Joseph DeVivo for US$99k worth of shares, at about US$0.95 per share. We do like to see buying, but this purchase was made at well below the current price of US$3.60. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Over the last year we saw more insider selling of Butterfly Network shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Butterfly Network Insiders Are Selling The Stock

Over the last three months, we've seen a bit of insider selling at Butterfly Network. Senior VP & CTO Andrei Stoica sold just US$47k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the selling simply isn't sufficiently substantial to be of much use as a signal.

Does Butterfly Network Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Butterfly Network insiders own 21% of the company, worth about US$152m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with 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. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Butterfly Network insiders selling. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we found 3 warning signs for Butterfly Network that deserve your attention before buying any shares.

Of course Butterfly Network may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.