Since the 15th of November, 11 insiders at Basic Energy have sold more than 2.7 million shares. The selling spree started just days after the company filed its 10-Q quarterly report. The filing showed Basic operating at a quarterly loss, with long-term debt exceeding its total assets.
Millions of Shares Sold Off
Insiders have unloaded their assets every few days for the past two weeks, after the initial big sell. The biggest seller in terms of total shares and value is Steven Webster, a Houston-based businessman who currently serves on Basic’s board of directors.
Along with his spouse, Mr. Webster sold off over 1.6 million common shares, ranging in price from $0.32 to as high as $0.52 per share. His total divestment has left Mr. Webster holding just over 27,000 shares of Basic Energy.
Insiders are required to report all stock transactions at their corporation by the SEC. The so-called Form 4 filings are made publicly available to investors. (For more on insider trading, see: Why CVS Insiders are Actively Buying Shares.)
Bad News for Basic?
Insiders bailing out of their positions has traditionally meant bad news for any company, but this particular pattern of selling might not spell trouble. (See also: Insider Selling Isn't Always A Bad Sign.)
Basic Energy has seen its share price jump recently, after a surprisingly solid 3Q earnings report was made public by the small company. (For more on Basic Energy's position in the marketplace, see: Basic Energy Holds Off Looming Default.)
Since the bulk of the selling was done by a single insider, there are other explanations than Basic Energy going down in flames. But regardless of why Mr. Webster sold almost his entire stake, it should tell investors that Basic is likely approaching a ceiling.
Shares of Basic Energy rose by 27%, from $0.39 to $0.51 per share, over the past 30 days.