The people on the inside of any company – the officers, directors, etc. – should know more about that particular company than anybody else, right?
The insiders are the ones who get the biggest news first.
So when half a dozen insiders of the same company all decide to sell off shares at the same time, you and I know that it’s time to find out more…
Insiders are just like anybody else – they want more money. And while they aren’t supposed to use inside information to gain an advantage over the public in the stock market, we’ve seen greed win out time and time again.
You see, if a company CEO learns of a success for a new drug trial within his company, he knows that the good news will likely push the stock price up when it becomes public information.
At that point, he has the chance to buy shares before the public gets that info, and then profit when the share price rises.
On the other hand, if a company’s officers all learn of a bad earnings report before it goes public, they may want to sell their shares before the bad news causes the share price of the company’s stock to decline.
And while insiders can also be selling their shares just because they need the cash or want to invest it elsewhere, it’s hard to call it a coincidence when SIX insiders of the same company all sell at the same time.
That’s what just happened for Facebook, Inc. (FB).
Insiders of FB just sold more than 116,000 shares for an estimated total of $11 million!
That’s big money even for this big-name stock.
So while we don’t yet know if these insiders were all selling for the same reason or what that potential reason is, I know that I don’t want to be left without a seat on the lifeboat if FB insiders really are starting to bail…
And by the same token, any bad news for any stock can turn into a moneymaking opportunity for us. If we can time it right, we can bet on that stock to go down in price.
When it does, we get paid.
So let’s pay close attention to FB as we move forward. If we see a chance to get in on a free-falling stock with the right move, we can make a lot of money very quickly.
