During a highly volatile week for markets, we saw insiders step up and purchase shares, although in aggregate it looked like both insider buying and selling declined compared to the prior week. The dip had to do with large purchases of Carvana (NYSE:CVNA) in a secondary offering the prior week and large sales of Tesla (TSLA) by Elon Musk to fund the purchase of Twitter (TWTR) as discussed last week.
Once you adjust for both those unusual transactions, insider buying went up last week while insider selling edged up a little. I am not a fan of “adjusted EBITDA” numbers reported by most companies these days but sometimes you do have to adjust the numbers for extreme outlier events like the Tesla sales. Otherwise you end up drawing wrong conclusions like this opinion piece by Mark Hulbert. With earnings season waning and a market decline that has seen some companies drop 80% or 90% from their peaks, I would not be surprised to see insider buying pick up pace in the coming days. Some market participants are seeing the action last week as signs of capitulation but if this is anything like the bear market after the dot com bubble burst, we have a ways to go before the market stabilizes.
