Helbiz (NASDAQ:HLBZ) stock is in the spotlight today following an insider purchase from CEO Salvatore Palella. Helbiz is a consumer-oriented electric micro-mobility provider that offers vehicles like scooters, bikes and mopeds. The company listed on the Nasdaq last August through a special purpose acquisition company (SPAC) merger. Helbiz received $24.5 million of gross cash proceeds as a result of the transaction.
Since its listing, HLBZ stock has plunged lower by more than 90%. Other micro-mobility providers, such as Bird Global (NYSE:BRDS), have suffered as well. Shares of BRDS stock have declined about 90% year-to-date (YTD).
Despite the decline in HLBZ, Palella has not sold a single share since the company listed on the Nasdaq. In fact, the CEO has purchased shares on seven separate occasions since then. Still, Palella is also the sole insider to have purchased shares since August 2021.
Let’s get into the details.
HLBZ Stock: CEO Salvatore Palella Buys 327,425 shares
On July 20, Palella purchased 327,425 shares at an average price of 62 cents per share. In total, the transaction amounted to just over $200,000. After the purchase, the CEO now owns 4.87 million shares, making him a 10% stakeholder of the company as well.
Excluding the recent HLBZ stock purchase, Palella’s last purchase was on June 6. On that day, the executive purchased 2.04 million shares at an average price of 99 cents per share. That transaction marked a massive purchase worth $2.2 million. Still, the batch of shares purchased in June is now sitting on a more than 25% loss.
So, why exactly did Palella choose to purchase more shares of Helbiz? Insiders are not required to disclose the reasoning behind their purchases. However, insiders ultimately only buy shares of their company for one reason: they believe the price will go up.
Helbiz Acquires Wheels
Last month, Helbiz announced that it had signed a letter of intent to acquire Wheels, an electric micro-mobility company. The transaction will be completed via a “primarily all-stock deal” and is expected to close by the end of 2022. Palella added:
“From a strategic perspective, this acquisition is expected to double revenue, expand the cities served, enhance margins, and reduce costs […] Our focus is to adapt and grow with profitability at the core of every decision.”
Wheels currently has some 8,000 active micro-mobility vehicles. The company operates in 12 cities and 4 universities across the United States.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
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.