TeraWulf Insider Stock Sales Prove Timely As Market Valuation Descends To US$2.1b

Insiders seem to have made the most of their holdings by selling US$227k worth of TeraWulf Inc. (NASDAQ:WULF) stock at an average sell price of US$3.24 during the past year. The company's market valuation decreased by US$417m after the stock price dropped 16% over the past week, but insiders were spared from painful losses.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for TeraWulf

The Last 12 Months Of Insider Transactions At TeraWulf

The Chief Accounting Officer & Treasurer, Kenneth Deane, made the biggest insider sale in the last 12 months. That single transaction was for US$227k worth of shares at a price of US$3.25 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$5.53. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 17% of Kenneth Deane's holding. Kenneth Deane was the only individual insider to sell shares in the last twelve months.

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!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that TeraWulf insiders own 15% of the company, worth about US$311m. 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 TeraWulf Tell Us?

The fact that there have been no TeraWulf insider transactions recently certainly doesn't bother us. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of TeraWulf insider transactions don't fill us with confidence. 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. At Simply Wall St, we've found that TeraWulf has 3 warning signs (2 are potentially serious!) that deserve your attention before going any further with your analysis.

But note: TeraWulf 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.