The Qantas Airways Limited (ASX: QAN) share price had a tough time on Tuesday.
The airline operator's shares sank deep into the red late in the session after the release of an announcement.
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What weighed on the Qantas share price?
Investors were hitting the sell button after Qantas revealed that its CEO, Alan Joyce, has been selling down the majority of his holding.
According to the release, Joyce sold 2.5 million Qantas shares through an on-market trade on 1 June for an average of $6.7479 per share. This equates to a total consideration of just under $17 million.
Following this sale, Qantas' outgoing leader is left with a holding of just 228,924 shares.
No explanation was given for the sale. Though, with Joyce retiring from the role in November, it is likely that this had some impact on its decision to sell.
Should you be selling?
Insider buying is often regarded as a bullish indicator, as few people should know a company better than its own directors. The theory is that if they 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, it was not overly surprising to see the Qantas share price drop on the news yesterday. Particularly given how its shares were trading within a whisker of a multi-year high when Joyce hit the sell button.
However, it is worth noting that Qantas held its investor day event last week and demonstrated how it plans to keep its record earnings at current levels in the coming years. So, it may be a little too soon to panic about a downturn in its performance.
Especially when brokers are overwhelmingly positive on the company's outlook. One of those is Goldman Sachs, which last week reiterated its buy rating and $8.50 price target on the company's shares. This implies potential upside of almost 34% for investors over the next 12 months.
If anything, this insider selling may have created a buying opportunity for the rest of us. But time will tell if that is the case.
