Kogan (ASX:KGN) share price on watch after $11 million co-founder sale

This insider has been selling shares…

The Kogan.com Ltd (ASX: KGN) share price will be one to watch on Monday.

This follows the announcement of significant insider selling after the market close on Friday.

boy giving thumbs up to $100 notes

Image source: Getty Images

What was announced?

After the market close on Friday, the ecommerce company released a change of director's interest notice revealing that one of its executives has been selling shares.

According to the note, Kogan's Co-Founder, Chief Financial Officer, Chief Operating Officer and Executive Director, David Shafer, sold a total of 1 million shares through a series of on-market trades between 31 August and 1 September.

The release notes that Mr Shafer sold 350,000 shares at an average price of $11.50, then a further 350,000 shares at an average of $11.18, and finally 300,000 shares at an average of $10.95.

This represents a total consideration of just over $11.2 million.

What now?

Heavy insider selling can weigh on shares, so the Kogan share price could potentially come under pressure today.

Though, it is worth noting that Mr Shafer still has a significant holding. Following this sale, he has 6,075,642 shares and 2,400,000 options.

In addition, Mr Shafer certainly cannot be accused of selling at the top. The Kogan share price is down 43% since the start of the year and down 57% from its 52-week high of $25.57.

Is the Kogan share price in the buy zone?

One leading broker that wouldn't be in a rush to sell the company's shares is Credit Suisse.

In response to its full year results last month, the broker put an outperform rating and $14.06 price target on its shares.

Based on the current Kogan share price, this implies potential upside of almost 28% over the next 12 months.

Credit Suisse appears to believe investors should look beyond the short term headwinds it is facing due to its strong long term growth potential.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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