Shares of fuel cell and hydrogen company Bloom Energy (NYSE:BE) jumped as much as 22.2% in trading Tuesday after an insider bought a large amount of stock. Shares were still up 19.5% at 3:30 p.m. EDT and holding, heading into the market's close.
Jeff Immelt, former CEO of GE, was the person who bought stock recently, and it was a big purchase. He acquired 70,000 shares of stock at an average price of $14.86 per share for more than $1 million in purchases.
The reason Immelt's purchase is so notable is because he is on the Board of Directors at Bloom Energy. As a board member, Immelt invariably gets inside information about the company's direction; the fact that he was bullish enough to put $1 million of his own money behind the company is seen as a good sign.
Insider transactions can be tricky for investors to decipher because we don't know the intention of purchases or sales. Sales may occur in order to buy a home, for example, or fund a child's college with options or grants awarded by the company, while purchases often tell us more. Immelt didn't have to buy Bloom Energy stock; he did so on the open market rather than with something like options. I think that's a positive sign for this renewable energy stock and its improving long-term outlook.