What Happened:
Shares of work management software maker Asana (NYSE: ASAN) jumped 5.62% in the morning session after CEO Dustin Moskovitz bought $17.4 million worth of shares. This purchase increases Moskovitz's direct ownership stake in Asana to 44.95 million shares and his indirect ownership stake to 4.15 million shares, which translates into over 50% ownership by the co-founder of the business. Moskovitz's purchase of Asana stock can be considered a bullish signal, as it shows that a key insider may have increased confidence in the company's future and is willing to invest his own money in it (above and beyond his already large ownership).
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What is the market telling us:
Asana's shares are very volatile and over the last year have had 61 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was four months ago, when the company gained 5.8% on the news that a regulatory filing showed that Co-founder and CEO Dustin Moskovitz bought 160k shares of Asana at prices between $22 and $24 for a total of nearly $3.7 million. Insider buying, especially by a founder or CEO, is usually a bullish signal showing that the "smart money" believes the stock is undervalued. These purchases were made as part of a 10b5-1 trading plan that Moskovitz adopted. A 10b5-1 is a predetermined trading plan set up by company executives to transact in company stock to avoid appearances of insider trading.
Asana is up 39.5% since the beginning of the year, but at $18.49 per share it is still trading 28.9% below its 52-week high of $26.02 from October 2022. Investors who bought $1,000 worth of Asana's shares at the IPO in September 2020 would now be looking at an investment worth $641.84.
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