Roblox Corporation (NYSE:RBLX) insiders sold US$14m worth of stock suggesting impending weakness.

The fact that multiple Roblox Corporation (NYSE:RBLX) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Roblox

Roblox Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Han Kim, sold US$5.0m worth of shares at a price of US$51.88 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$31.65). So it may not tell us anything about how insiders feel about the current share price.

Roblox insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Roblox Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Roblox. In total, insiders dumped US$2.1m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does Roblox Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Roblox insiders own 13% of the company, currently worth about US$2.4b based on the recent share price. 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 Do The Roblox Insider Transactions Indicate?

Insiders sold Roblox 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 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 Roblox. Be aware that Roblox is showing 5 warning signs in our investment analysis, and 1 of those is potentially serious...

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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, but not derivative transactions.

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