hi there...the SEC Form 4 says CFO purchased shares for $22 each however when you look up the stock it has never been close to $22...?

hey there everyone, i have a question...i read an article of a insider (CFO of a company) purchase 1000 shares for $22 a share few days ago...however the stock has never even been close to as high as $22 in the last 5 years...this entire year it has not gone over $10...i have seen this happen before, what's the reason for this? why do i sometimes see insider buying where it claims a insider spent a certain amount of money per share but the stock has no record being that high? thank you guys...

3 Answers

  • 4 weeks ago

    Without doing more research I cannot be sure, but my guess is that the purchase was for preferred stock, not common stock. 

    I do not believe that it was options on the common stock as another answer indicated, since it is extremely unlikely that anyone would exercise options to buy the stock so much above the current market price.

  • kswck2
    Lv 7
    4 weeks ago

    Stock options for insiders are often issued at a set price, which may or may not be the current open market price. 

  • 4 weeks ago

    Stocks/shares are worth what a person thinks they are worth, regardless of how the company performs on the share market.

    Insiders ARE entitled to buy shares of their company. It's only a problem if there is manipulation of the stock price at the same time, with the inside having knowledge not available to anyone else. 

Still have questions? Get your answers by asking now.