This Insider Has Just Sold Shares In Core Scientific

We wouldn't blame Core Scientific, Inc. (NASDAQ:CORZ) shareholders if they were a little worried about the fact that Adam Sullivan, the CEO, President & Director recently netted about US$6.0m selling shares at an average price of US$16.24. That sale reduced their total holding by 23% which is hardly insignificant, but far from the worst we've seen.

Check out our latest analysis for Core Scientific

Core Scientific Insider Transactions Over The Last Year

In fact, the recent sale by Adam Sullivan was the biggest sale of Core Scientific shares made by an insider individual in the last twelve months, according to our records. 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$11.46). So it may not shed much light on insider confidence at current levels.

Happily, we note that in the last year insiders paid US$2.0m for 468.76k shares. On the other hand they divested 808.90k shares, for US$12m. In total, Core Scientific insiders sold more than they bought over the last year. The average sell price was around US$15.43. We are not joyful about insider selling. But the selling was at much higher prices than the current share price (US$11.46), so it probably doesn't tell us a lot about the value on offer today. The chart below shows insider transactions (by companies and individuals) over the last year. 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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Insider Ownership Of Core Scientific

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Core Scientific insiders own 6.6% of the company, currently worth about US$209m based on the recent share price. 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 Core Scientific Tell Us?

Insiders sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. 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. Our analysis shows 4 warning signs for Core Scientific (2 make us uncomfortable!) and we strongly recommend you look at these before investing.

Of course Core Scientific 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.