Insiders At Arqit Quantum Sold US$7.2m Of Stock Potentially Indicating Weakness

Even though Arqit Quantum Inc. (NASDAQ:ARQQ) stock gained 11% last week, insiders who sold US$7.2m worth of stock over the past year are probably better off. Selling at an average price of US$69.40, 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 do think it is perfectly logical to keep tabs on what insiders are doing.

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Arqit Quantum Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Independent Vice Chairman & Senior Independent Director, Manfredi D’Ovidio, for US$7.2m worth of shares, at about US$69.40 per share. 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$31.89). So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Manfredi D’Ovidio.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Arqit Quantum

I will like Arqit Quantum 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.

Insiders At Arqit Quantum Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Arqit Quantum. In total, Independent Vice Chairman & Senior Independent Director Manfredi D’Ovidio dumped US$7.2m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

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. Arqit Quantum insiders own about US$204m worth of shares (which is 50% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Arqit Quantum Insiders?

An insider sold stock recently, but they haven't been buying. Looking to the last twelve months, our data doesn't show any insider buying. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 6 warning signs (3 make us uncomfortable!) that you ought to be aware of before buying any shares in Arqit Quantum.

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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.