Stock Analysis

Don't Ignore The Fact That This Insider Just Sold Some Shares In LivePerson, Inc. (NASDAQ:LPSN)

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NasdaqGS:LPSN
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Some LivePerson, Inc. (NASDAQ:LPSN) shareholders may be a little concerned to see that the Founder, Robert LoCascio, recently sold a substantial US$786k worth of stock at a price of US$62.09 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 0.3%.

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The Last 12 Months Of Insider Transactions At LivePerson

In fact, the recent sale by Founder Robert LoCascio was not their only sale of LivePerson shares this year. Earlier in the year, they fetched US$62.09 per share in a -US$2.5m sale. That means that an insider was selling shares at slightly below the current price (US$65.62). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. 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. It is worth noting that this sale was only 0.9% of Robert LoCascio's holding.

Insiders in LivePerson didn't buy any shares in 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!

insider-trading-volume
NasdaqGS:LPSN Insider Trading Volume February 28th 2021

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Insider Ownership of LivePerson

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that LivePerson insiders own 7.2% of the company, worth about US$321m. 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 Do The LivePerson Insider Transactions Indicate?

Insiders sold LivePerson shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 4 warning signs for LivePerson (1 is potentially serious) you should be aware of.

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, but not derivative transactions.

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What are the risks and opportunities for LivePerson?

LivePerson, Inc., together with its subsidiaries, provides conversational commerce software and Gainshare solutions.

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Risks

  • Shareholders have been diluted in the past year

  • Volatile share price over the past 3 months

  • Currently unprofitable and not forecast to become profitable over the next 3 years

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