Insider Buyers Lose US$42k As D-Wave Quantum Sheds US$17m

The recent 12% drop in D-Wave Quantum Inc.'s (NYSE:QBTS) stock could come as a blow to insiders who purchased US$64k worth of stock at an average buy price of US$2.55 over the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$21k, which is not what they expected.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for D-Wave Quantum

The Last 12 Months Of Insider Transactions At D-Wave Quantum

In the last twelve months, the biggest single purchase by an insider was when Independent Chairman of the Board Steven West bought US$64k worth of shares at a price of US$2.55 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$0.85). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Steven West was the only individual insider to buy shares in the last twelve months.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of D-Wave Quantum

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own US$1.3m worth of D-Wave Quantum stock, about 1.0% of the company. We prefer to see high levels of insider ownership.

So What Do The D-Wave Quantum Insider Transactions Indicate?

The fact that there have been no D-Wave Quantum insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we'd be more comfortable if they owned more D-Wave Quantum stock. 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. Be aware that D-Wave Quantum is showing 5 warning signs in our investment analysis, and 3 of those shouldn't be ignored...

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 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.