The Appen Ltd (ASX: APX) share price will be one to watch this morning after an announcement by the global leader in the development of high-quality, human-annotated training data for machine learning and artificial intelligence.
What did Appen announce?
Appen’s announcement after the market close on Thursday revealed that a number of executives have been selling shares this week.
The biggest seller was Non-Executive Chairman, Chris Vonwiller. He offloaded 2 million Appen shares on-market for an average of $29.00 per share. This represents a total consideration of $58 million.
Also selling shares was the company’s CEO and Managing Director, Mark Brayan. He sold 95,535 shares for an average of $30.60 per share. This equates to a total consideration of approximately $2.9 million.
And finally, another insider that was selling shares was Non-Executive Director, Bill Pulver. Mr Pulver sold 275,000 shares on-market for an average of $30.6865 per share. This represents a total consideration of $8.4 million.
Why were they selling shares?
Appen helpfully provided explanations for each of the sales.
Mr Vonwiller sold his shares for a number of personal reasons, including philanthropic endeavours.
Whereas the company’s CEO was selling shares to satisfy tax obligations and diversify personal investments. The latter was the reason Mr Pulver gave for selling his shares.
It is worth noting that all three directors still have sizeable shareholdings, even after these sales.
Should you be concerned?
Insider selling rarely goes down well with investors. The theory is that if a director was confident its shares would go a lot higher from here, they wouldn’t sell them today. So, the decision to sell is often interpreted to be a bearish indicator.
However, I think the explanations they have given is reasonable. And as I mentioned above, they still have plenty of their wealth tied up in the company.
In light of this, if the Appen share price were to pullback meaningfully on the news, I would consider picking up shares.
After all, given the strong growth potential the company has over the next decade, I believe its shares could be a lot higher than this level in 2030.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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