Reddit Independent Director Porter Gale Sells 49% Of Holding

Some Reddit, Inc. (NYSE:RDDT) shareholders may be a little concerned to see that the Independent Director, Porter Gale, recently sold a substantial US$3.4m worth of stock at a price of US$170 per share. That sale reduced their total holding by 49% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for Reddit

Reddit Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Chief Operating Officer, Jennifer Wong, for US$17m worth of shares, at about US$32.30 per share. That means that an insider was selling shares at slightly below the current price (US$160). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. This single sale was just 23% of Jennifer Wong's stake.

In the last twelve months insiders purchased 13.00k shares for US$442k. But they sold 1.57m shares for US$62m. In total, Reddit insiders sold more than they bought over the last year. 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!

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Does Reddit 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. We usually like to see fairly high levels of insider ownership. Reddit insiders own about US$1.3b worth of shares (which is 4.3% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Reddit Tell Us?

An insider sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. You'd be interested to know, that we found 1 warning sign for Reddit and we suggest you have a look.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.