Chief Executive Officer at Poseida Therapeutics (NASDAQ: PSTX), Eric Ostertag, made a large purchase and sale of company shares on September 14, 2021 according to SEC filings.
On September 14, Eric Ostertag acquired 21,281 Poseida Therapeutics shares at prices ranging from $1.17 to $9.15 per share for a total of $172,729 according to the Form 4 filing with the U.S. Securities and Exchange Commission. On the same day, he sold his shares in the open market for $8.14 a piece to raise a total of $162,712 from the sale.
Following the sale, Ostertag still held 1,142,141 shares of the firm, worth $9.4 million at the time of his large sale. However, the company stock has been in a downfall since this sale occurred, and has dropped almost $3 since the beginning of 2022.
Poseida Therapeutics shares are currently trading down 5.92% at $4.29 at the time of this writing on Friday morning.
Why Insider Trades Are Important
Insider transactions should not be used as a primary factor for an investment decision, but they can be important for investors to consider.
In legal terms, an "insider" is a shareholder who owns at least 10% of a firm. This might include executives in the c-suite or major hedge funds. These insiders are required to disclose their transactions via a Form 4 filing, which must be submitted within two business days of the transaction.
When a company insider makes a new purchase, it's an indication that the stock will rise.
Insider sales, on the other hand, may be made for a number of reasons and may not always imply that the seller believes the stock will go down.
Important Transaction Codes
Investors look for companies that have completed transactions in the open market, as shown in Table I of the Form 4 filing. A P-in-Box 3 indicates a purchase, while an S signifies a sale. The transaction code C represents the conversion of an option, while transaction code A signifies that the insider may have been compelled to sell shares in order to obtain compensation that had been promised upon being hired by the firm.