The Appen Ltd (ASX: APX) share price will be on watch this morning after the release of another change of director's interest notice out of the global leader in the development of high-quality, human-annotated datasets for machine learning and artificial intelligence.
Last week the company revealed that its chief executive officer and managing director, Mark Brayan, sold 100,000 shares through a series of on-market trades.
This was done to satisfy tax obligations and to diversify personal investments. Mr Brayan was left with 404,414 shares and 442,583 performance rights, subject to meeting vesting conditions.
Late on Tuesday Appen revealed that non-executive director, Bill Pulver, has followed the lead of Mr Brayan by selling a large number of shares on-market recently.
According to the notice, Mr Pulver offloaded approximately 39% of his holding or 392,819 shares for an average of $27.513 per share last week. This equates to a total consideration of approximately $10.8 million. Following the sale of these shares, Mr Pulver is left with a holding of 607,384 shares.
These two directors are not the only tech executives to sell shares recently.
Last week Afterpay Touch Group Ltd (ASX: APT) confirmed that the sell down of shares by Anthony Eisen, Nicholas Molnar, and David Hancock was successful. And late last month Rod Drury sold 2 million Xero Limited (ASX: XRO) shares for a total of $116 million.
What now?
Many investors regard insider buying as a bullish indicator. This is because if insiders have the confidence to buy shares, it could be a sign that things are going well and they expect them to appreciate in value.
Conversely, when directors sell shares it is often regarded as a bearish indicator as you'd be unlikely to sell shares if you felt they were about to increase in value.
In light of this, I feel it is understandable why insider selling rarely goes down well with the market and can weigh on shares.