we don’t blame Soundhound AI Inc. (NASDAQ:SOUN) shareholders are a little concerned about the fact that company insider Lawrence Marcus recently sold shares priced at an average price of $2.52 for a profit of about $505,000. I don’t think there is. The sale reduced his holdings by 26%. This is by no means critical, but it’s far from the worst situation I’ve ever seen.
Check out the latest analysis from SoundHound AI.
Insider trading at SoundHound AI over the last 12 months
Of note, the recent sale by Lawrence Marcus is the largest insider sale of SoundHound AI shares we’ve seen in the last year. This meant that insiders were selling the shares for just below the current price ($2.73). As a general rule, if an insider is selling below the current price, it is considered discouraging as it suggests they are happy with the lower valuation. However, we don’t know exactly what the seller thinks about the stock, as they may sell for a variety of reasons. This single sale represented only 26% of Lawrence Marcus’ stake.
No SoundHound AI insider bought a single share last year. The chart below shows insider trading (by company and individual) over the past year. You can see the exact details of each insider trading by clicking on the chart below.
If you want to buy stocks that insiders are buying instead of selling stocks, you might like this free List of companies. (Hint: Insiders are buying them).
Insider Ownership
Another way to test alignment between company leaders and other shareholders is to look at the number of shares they own. Usually, the higher the insider’s ownership, the more likely the insider will be motivated to build the company in the long term. It’s great that a SoundHound AI insider owns his 20% of the company, worth about $119 million. Most shareholders would welcome this type of insider ownership as it suggests that management incentives are aligned well with other shareholders.
So what does the SoundHound AI insider trading show?
Insider recently sold SoundHound AI shares, but did not buy. Looking at the last 12 months, our data shows no insider buying. The company boasts high insider ownership but is a bit hesitant given its history of stock sales. So, while it’s useful to know what insiders are doing when it comes to buying and selling, it’s also useful to know the risks facing a particular company. To solve this we discovered: 5 warning signs (2 should not be ignored!), what you should know before buying SoundHound AI stock.
Don’t miss this one if you want to check out another company that might be financially better free An interesting list of companies with high return on equity and low debt.
For the purposes of this article, an insider refers to an individual who reports a transaction to the relevant regulatory body. The Company currently accounts for open market transactions and private disposals, but not derivative transactions.
Valuation is complicated, but we’re here to help make it simple.
Check out our comprehensive analysis, including the following, to see if SoundHound AI is potentially overrated or underrated. Fair value estimates, risks and warnings, dividends, insider trading and financial health.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst projections using only unbiased methodologies and articles are not intended as financial advice. This is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on underlying data. Please note that our analysis may not take into account the latest announcements or qualitative material from price-sensitive companies. Simply Wall St does not have any positions in any of the securities mentioned.
