The market may be sinking lower today, but that hasn’t stopped the Afterpay Touch Group Ltd (ASX: APT) share price from pushing higher.
In late morning trade the payment solutions company’s shares are up 3.5% to $7.28.
Why are Afterpay Touch’s shares on the rise today?
This morning the company confirmed that executive directors Anthony Eisen, Nicholas Molnar, and David Hancock have each sold shares off-market this week.
According to the release, the transactions were in accordance with its previous announcement and were done for asset diversification reasons.
Eisen and Molnar have each sold 10% of their stake or 2.5 million shares off-market for a consideration of $6.94 per share or approximately $17.3 million in total. Neither have plans to sell any further shares over the next 12 months.
Hancock has offloaded 500,000 shares or 21% of his holding at an estimated $6.94 per share.
The transaction, which was approved by the independent board of directors, was undertaken by way of an off-market bookbuild to institutional and professional investors. No further details on their identities have been provided.
Should you invest?
While insider selling rarely goes down well with the market, I think this selling is entirely understandable. Furthermore, the price that the transactions took place at was less than 1.5% below the last close price.
If institutional investors are willing to purchase a significant number of shares at this level, it’s safe to say they are confident that the risk/reward on offer is sufficient.
And with the company recently launching in the U.S. market, they might be right to think that way.
The size of the U.S. online retail market is significantly bigger than in Australia. So if the Afterpay platform resonates well with U.S. consumers, the company could be on the verge of seeing its sales growth accelerate again.
While Afterpay Touch does carry significant risk due to its premium valuation, I remain confident that in the long-term shareholders will be rewarded.
One of the world’s richest people is sounding the alarm on what could be a trillion-dollar technology.
And when a tech billionaire – several times over – speaks, it pays to listen.
This could be your chance to get in on the ground floor!
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO and WiseTech Global. 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.