Shares of Helbiz (NASDAQ:HLBZ) are up more than 20% after CEO Salvatore Palella announced a $2 million insider purchase. The company operates as a micro-mobility provider and offers a fleet of vehicles including electric scooters, bikes and mopeds.
In regards to his purchase, Palella explained:
“I continue to be excited and hopeful for the future of Helbiz and the impact that we will have on the world … Looking forward, we will continue to focus on cutting costs, streamlining processes and on the important KPIs of our business. This purchase today is a personal commitment from me on the future of the company and our continued success.”
The former special purpose acquisition company (SPAC) has had a rough year, boasting a 52-week high of $41.88 and a 52-week low of 91 cents. Year-to-date, HLBZ stock has lost more than 80% of its market capitalization. Helbiz officially began trading on the Nasdaq exchange on August 13. The SPAC merger provided the company with $24.5 million in gross cash proceeds.
Despite the steep decline, Palella has not sold a single share since August. In fact, he has purchased shares of HLBZ at least six times since it made its Nasdaq debut. Let’s get into the details of his most recent purchase.
Helbiz CEO Salvatore Palella Buys HLBZ Stock
On June 6, the CEO purchased 2.04 million shares at an average price of 99 cents per share, increasing his existing position by about 82%. The shares were purchased from Finbeauty, an investment firm based in Italy. After the purchase, the CEO now owns 4.54 million shares of HLBZ stock, making him a 10% owner of the company.
Palella has purchased all 4.54 million shares since August. Excluding the June 6 buy, he most recently picked up shares on April 29. On that day, Palella bought 1.4 million shares at an average price of $1.50. He also purchased 200,000 five-year warrants to purchase Class A shares for $11.50. The warrants have an expiration date of Aug. 12, 2026.
Since its Nasdaq debut, no insider of Helbiz has sold shares. An SEC filing states that Helbiz insiders who hold 75,000 shares or more are subject to a lockup period of six months after the closing of the SPAC transaction. So, the expiration has already passed for these insiders.
Meanwhile, Palella is prohibited from selling shares until at least one year after the closing of the SPAC. Furthermore, he is the only insider to have purchased shares since Helbiz’s market debut.
As evidenced by his purchases, Palella clearly believes his company is undervalued. HLBZ currently trades at a price-to-sales (P/S) ratio of 1.46x, which is lower than the S&P 500’s P/S ratio of 2.62x. Still, Helbiz is unprofitable, and it is a prerequisite for companies to be profitable to be considered a candidate for the S&P 500.
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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.