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Insider Buys Kaixin Auto Shares

Benzinga Insights
·2 mins read

Kaixin Auto Hldgs Inc (NASDAQ:KXIN) was trading 1.1% higher from the previous closing price. Shareholder Value Fund filed a Form 4 with the SEC on Monday, July 20. The insider bought 5,119,571 shares at $1.32 on Tuesday, Apr 30, and bought 4,213,629 shares at $1.00 on Monday, Jul 06. . After the transactions, the executive's stake in Kaixin Auto Hldgs Inc. movedto 5,119,571 shares.

Why Insider Transactions Are Important?

While transactions from an insider shouldn't be used as the sole item to make an investment or trading decision, an insider buying or selling stock in their company can be a good added factor that leads to more conviction in a decision.

When an insider buys stock after an important sell off, that can indicate the insider's faith in the success of the organization. Henceforth, if the stock is bought at new highs, it might be because the insider feels that the stock is not overvalued. Conversely, insiders who are selling stock at new lows can potentially indicate some kind of capitulation moment. Insiders selling at new highs can indicate that exec wants to "take some profit" and "lock in a gain."

Important Transaction Codes

Wall Street tends to focus on insider transactions which take place in the open market, viewed inside a Form 4 filing via codes P for purchase and S for sale. An open-market transaction means the insider went into the market of their own volition and made an active decision about the potential path for a company and its stock moving forward.

Transaction codes other than P or S are often viewed with less conviction as they are often not tied to a decision by the exec. As an example, transaction code C indicates the conversion of an option. Transaction code A indicates the insider may have been forced to sell shares in order to receive compensation the exec was promised upon being hired by a company.

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