General Motors (NYSE:GM) is in the spotlight after it was disclosed that Executive Vice President and CFO Paul Jacobson recently purchased shares of the company. GM stock is down over 30% year-to-date (YTD), exacerbated by semiconductor shortages, inflation and rising interest rates. In an interview with Yahoo!, CEO Mary Barra admitted, “We are still seeing some constraints in products.” In addition, Barra expects the semiconductor shortage to “last into 2023.”
Despite the supply chain threats, CFO Paul Jacobson believes that now is the time to buy GM stock.
CEO Paul Jacobson Buys GM Stock
According to a Form 4 filing, Jacobson bought 35,000 shares on April 28 at an average price of $38.79. In total, the purchase amounted to $1.35 million. That’s no pocket change.
Now, Jacobson directly owns a total of 110,000 shares of his own company. Furthermore, the purchase was not enacted via a prearranged 10b5-1 trading plan. Most insiders utilize a 10b5-1 plan to avoid accusations of insider trading using material, non-public information.
Jacobson is undoubtedly bullish on the future potential of GM, as evidenced by his recent purchase. The company currently has plans to take market share of the electric vehicle (EV) industry, as well as the electric boat industry.
According to Nasdaq, GM insiders have made nine open market buys and 28 sales in the past 12 months. In the past year, insiders have purchased 931,282 shares while selling 1.08 million shares. In total, insiders have accounted for net activity of 150,522 shares sold.
What’s Next for General Motors?
GM has ambitious plans for the upcoming decade. In the next few years, the company plans on investing $35 billion into EV development. Meanwhile, GM currently has a production output capacity of 400,000 EVs per year for 2022 and 2023. By 2025, GM plans on releasing 30 new EV models.
The launch of the upcoming Silverado EV may be a positive catalyst for GM. GM already has more than 140,000 reservations for the EV, which will be powered by its Ultium platform. The proprietary platform can accommodate a wide range of vehicles, such as trucks, SUVs and crossovers. Meanwhile, the Ultium battery promises to provide up to 450 miles of range on a single charge.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
