The Chief Creative Officer and co-founder of Robinhood (NASDAQ:HOOD), Baiju Bhatt, sold 90,021 shares of HOOD stock on Oct. 12, the company disclosed in a Securities and Exchange Commission (SEC) filing this morning. Bhatt obtained nearly $850,000 for the shares.
HOOD stock is up about 2% this morning.
The Implications of the News for HOOD Stock
After the transaction, Bhatt still owns over 402,400 shares of HOOD, so evidence suggests that the executive has far from completely lost faith in Robinhood and its shares. Moreover, many investors are still very fearful about the impact of high interest rates and geopolitical issues on stocks, so Bhatt’s transaction may have been triggered by his own worries about those issues.
Having said that, however, I believe that Bhatt’s decision to unload nearly 20% of his stake in HOOD certainly does not bode well for the company and its shares and could indicate that it will struggle in the near-to-medium term.
Also noteworthy is that Bhatt is a multi-billionaire, so the chances that he needed the funds to pay off a loan or send a child to college are quite low. As a result, the odds are high that he sold the stock simply because he expects the shares’ price to decline in the coming months and quarters.
What Investors Should Be Watching
The owners of HOOD stock and those thinking of buying the shares should be watching the stock market and crypto prices. HOOD directly or indirectly generates most of its revenue from trades of those instruments, and the trading volumes of these assets tend to be much higher when their value is increasing. Therefore, HOOD will be helped if the value of stocks and cryptos rise.
Additionally, of course, investors should keep an eye on the company’s overall financial performance.
On the date of publication, Larry Ramer did not have (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.