Salesforce Shares Were Sold For US$238 Million, Suggesting Hesitancy

(CTN News) – Over the past year, many Salesforce, Inc. (NYSE:CRM) insiders have sold their stocks, which may be of interest to the company’s shareholders.

When analyzing insider transactions, it is usually more useful to identify whether insiders are buying or selling, since the latter conveys an ambiguous message. Shareholders should, however, investigate further if a large number of insiders sell securities.

It is perfectly logical to keep an eye on what insiders are doing, despite the fact that insider transactions are not the most important factor when it comes to long-term investing.

The last year’s Salesforce insider transactions

As we can see from the chart above, the largest insider sale over the past year was made by Marc Benioff, who sold US$132m worth of shares at about US$267 per share. In other words, an insider may have wanted to cash in some shares even when the share price was below the current price of US$293.

If insiders have been selling, especially below the current price, we generally consider it a negative sign, since it indicates a low price was considered reasonable by them.

Despite the fact that insider selling is not a positive sign, we cannot be certain if it represents the opinion of insiders that the shares are fully valued. Therefore, insider selling is only a weak indication. A mere 2.0% of Marc Benioff’s stock was sold in this single transaction.

Shares of Salesforce were not purchased by insiders in the past year. Following is a visual representation of insider transactions (by companies and individuals) over the past year. Below is a graph that shows who sold, for how much, and when.

Salesforce stocks are being sold by insiders

A significant amount of insider selling has taken place at Salesforce over the last three months. Over the course of that period, Co-Founder Marc Benioff sold US$132 million worth of shares, and we did not record any purchases. In general, this makes us a bit cautious, but it is not the be all and end all of the situation.

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