Some System1, Inc. (NYSE:SST) shareholders may be a little concerned to see that the CEO & Chairman, Michael Blend, recently sold a substantial US$7.2m worth of stock at a price of US$1.50 per share. That diminished their holding by a very significant 69%, which arguably implies a strong desire to reallocate capital.

System1 Insider Transactions Over The Last Year

Notably, that recent sale by Michael Blend is the biggest insider sale of System1 shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$1.51. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was 69% of Michael Blend's holding.

Michael Blend divested 5.50m shares over the last 12 months at an average price of US$1.50. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insider Ownership

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It appears that System1 insiders own 26% of the company, worth about US$36m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At System1 Tell Us?

An insider sold System1 shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing System1. In terms of investment risks, we've identified 2 warning signs with System1 and understanding these should be part of your investment process.

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For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com