Are Zynga Inc. Insiders Really Selling?

A Fool takes a look at the record to help you better understand insider buying and selling.

Jan 31, 2014 at 3:13PM

Not every Form 4 filing specifies a buy or sale of stock by a company insider. Sometimes the story is more complicated, Fool contributor Tim Beyers says in the following video.

Take Zynga (NASDAQ:ZNGA), the social-gaming company that recently shut down YoVille and which has struggled to keep growing traffic amid growing competition from apps and big-ticket console games such as Rockstar's Grand Theft Auto V.

A recent spate of filings shows what, at first glance, looks like selling by insiders Stanley Meresman, Mark Vranesh, and and Devang Shah. But look at the footnotes and you'll find something different entirely. They didn't sell; they converted "B" shares to "A" shares. And in the cases of Vranesh and Shah, they sold only enough shares to cover the taxes involved with converting and exercising previously restricted stock. Meresman sold in accordance with a 10b5-1 programmed trading plan.

Is that a bullish sign? Tim isn't so sure. The bigger point may be that Zynga executives aren't cashing in with the stock trading only $1 a share over its 52-week low. Now probably isn't the time to be selling or shorting this stock.

Do you agree? What do you think of the insider action at Zynga? Please watch the video to get Tim's full take and then leave a comment to let us know whether you would buy, sell, or short Zynga stock at current prices.

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Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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