As MicroStrategy Incorporated's (NASDAQ:MSTR)) market cap dropped by US$366m, insiders who sold US$1.6m worth of stock were able to offset their losses

Over the past year, insiders sold US$1.6m worth of MicroStrategy Incorporated (NASDAQ:MSTR) stock at an average price of US$803 per share allowing them to get the most out of their money. The company's market valuation decreased by US$366m after the stock price dropped 13% over the past week, but insiders were spared from painful losses.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At MicroStrategy

In the last twelve months, the biggest single sale by an insider was when the Independent Director, Carl Rickertsen, sold US$1.6m worth of shares at a price of US$803 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$216). So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Carl Rickertsen. Notably Carl Rickertsen was also the biggest buyer, having purchased US$1.5m worth of shares.

In the last twelve months insiders purchased 8.50k shares for US$1.5m. On the other hand they divested 2.00k shares, for US$1.6m. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that MicroStrategy insiders own 17% of the company, worth about US$426m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At MicroStrategy Tell Us?

It doesn't really mean much that no insider has traded MicroStrategy shares in the last quarter. While we feel good about high insider ownership of MicroStrategy, we can't say the same about the selling of shares. 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. Every company has risks, and we've spotted 5 warning signs for MicroStrategy you should know about.

But note: MicroStrategy may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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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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.