It has been an eventful day for the Redbubble Ltd (ASX: RBL) share price on Thursday.
In early trade, the ecommerce company's shares were down as much as 8.5% to $3.83.
The Redbubble share price has recovered since then and is now trading just 1% lower for the day at $4.15.
Why is the Redbubble share price bouncing around?
Investors were quick to sell down the Redbubble share price this morning after the company revealed that its Co-Founder, former CEO, and current Chairman, Martin Hosking, has been selling shares.
According to the release, Mr Hosking sold a total of 5 million Redbubble shares on-market on Wednesday for an average of $4.20 per share. This equates to a total consideration of $21 million for the shares.
As we saw recently with insider selling at Dicker Data Ltd (ASX: DDR), this provoked a negative (and potentially unwarranted reaction) from some investors.
Particularly given how Mr Hosking, like David Dicker from Dicker Data, still has a significant holding after the sale.
Why is he selling shares?
Redbubble provided the market with an explanation for the sale. Which, judging by the Redbubble share price recovery, appears to have eased nerves.
It explained: "The sale of shares by Mr Hosking has been undertaken to meet Mr Hosking's financial commitments. On completion of the sale Mr Hosking will continue to hold an interest in 39.5 million Redbubble shares (representing 14.43% of all issued Redbubble shares), and he will remain as Redbubble's largest shareholder. Mr Hosking has confirmed he remains committed as a long-term significant shareholder of Redbubble."
Furthermore, with Redbubble shares down 30% in 2021, Mr Hosking certainly cannot be accused of selling at the top.
Is this a buying opportunity?
The team at Morgans believe the weakness in the Redbubble share price this year is a buying opportunity.
Late last month the broker upgraded the company's shares to an add rating with a $4.83 price target. This implies potential upside of greater than 20% over the next 12 months.
