Michael Saylor: MicroStrategy insider sells 1,851 shares sparking investor concerns

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MicroStrategy executive accused of insider trading after sale of 1,851 shares of company. — AFP/File
MicroStrategy executive accused of insider trading after sale of 1,851 shares of company. — AFP/File

Michael Saylor, Executive Chairman at MicroStrategy, which provides business intel, mobile software, and cloud-based services, has sold a large number of his stocks in the company, sending a wave of panic among investors, GuruFocus reported.

Per a recent US Securities and Exchange Commission (SEC) filing, Saylor, who serves as both Executive Chairman and holds a 10% ownership stake in MicroStrategy, shed 1,851 shares on March 25, 2024 — not for the first time.

The sale, valued at $3,372,046.08 with an average price of $1,822.08 per share, is consistent with the trend of insider selling within MicroStrategy. Over the past year, Saylor and other insiders haven't bought any shares but made 113 sales — a total of 260,000 shares.

Analysts say this insider trading can panic investors, especially keeping in view MicroStrategy's current valuation. On the date of the sale, the company's market cap stood at $31.844 billion with a price-to-earnings ratio of 66.61. This ratio is considerably higher than both the industry average and MicroStrategy's own historical median.

Furthermore, the stock's price-to-GF-Value ratio – a metric used by GuruFocus to estimate a company's intrinsic value – paints a picture of potential overvaluation. At the time of the sale, the ratio stood at 7.33, indicating a significant difference between the stock price and GuruFocus's estimated value.

"While MicroStrategy remains a leader in business analytics software, Saylor's recent sale and the broader selling trend within the company suggest that some insiders might have concerns about the stock's current valuation," as per GuruFocus analysis.