The Splitit Payments Ltd (ASX: SPT) share price has slipped into the red during afternoon trade today, going for 43.5 cents at the time of writing.
Yet Splitit shares have climbed over 23% in the past week of trading, well ahead of the S&P/ASX 200 Index (ASX: XJO)'s slump of 1% in this time.
Let's investigate further.
What's fuelling the Splitit share price lately?
The Splitit share price has reversed some of its losses in the last week after a board member took the opportunity to buy some of the company's shares at discounted prices.
Splitit's non-executive chairperson Dawn Robertson collected 100,000 shares last week, fully paid for, at a price of 34.5-35.5 cents apiece.
This is all well and good, but what does it mean for Splitit shares?
It comes down to the market's perception and reaction to Robertson's in-house purchase.
When a public company's executive, board member or key stakeholder increases the size of their investment in the entity, it generally suggests that a particular individual is confident of the company's good fortune moving forwards.
Why else would they be buying more shares? Surely not just because it's good policy.
Contrast this to the opposite situation – where insiders sell their shares as they aren't confident the company will continue performing.
That generally results in a dramatic share price decrease, and fittingly so.
These are important data points because executives and board members have privileged access to information about the company that we, as investors, simply don't.
Investors don't necessarily have the in-depth knowledge of the inner workings of most public companies. So when a non-executive director purchases a bunch of shares out of their own pocket, putting two + two together, it signals that something is up. Perhaps, something good.
All of this is common market behaviour in response to board directors and company executives buying or selling their shares in the company.
It's just one other indicator that investors use to make informed decisions on which direction a shares' price is set to go into the future.
Splitit share price snapshot
The Splitit share price has been bathing in a pool of red this year, having posted a loss of around 67% since January 1.
This increases its loss over the past 12 months to 69.5%. Both of these results are well behind the broad index's return of about 25% this past year.
