Don't Ignore The Insider Selling In Riot Platforms

Some Riot Platforms, Inc. (NASDAQ:RIOT) shareholders may be a little concerned to see that the Executive VP, William Jackman, recently sold a substantial US$3.9m worth of stock at a price of US$15.78 per share. However, that sale only accounted for 9.9% of their holding, so arguably it doesn't say much about their conviction.

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Riot Platforms Insider Transactions Over The Last Year

Notably, that recent sale by William Jackman is the biggest insider sale of Riot Platforms shares that we've seen in the last year. That means that even when the share price was slightly below the current price of US$15.89, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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. We note that the biggest single sale was only 9.9% of William Jackman's holding.

All up, insiders sold more shares in Riot Platforms than they bought, over the last year. 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!

Check out our latest analysis for Riot Platforms

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Riot Platforms insiders own 7.0% of the company, currently worth about US$409m 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.

So What Do The Riot Platforms Insider Transactions Indicate?

An insider sold Riot Platforms shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. While conducting our analysis, we found that Riot Platforms has 4 warning signs and it would be unwise to ignore them.

But note: Riot Platforms 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 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.