Shares of GreenSky (NASDAQ:GSKY) have skyrocketed today, up by 13% as of 12:30 p.m. EST, after CEO David Zalik and Director Robert Sheft each bought shares. The insider transactions were open market purchases, often considered the most bullish type of insider activity.
In regulatory filings from yesterday evening, the fintech company disclosed that Zalik and Sheft scooped up a little over 1.1 million shares, each at an average price of approximately $3.47. That translates into a $3.8 million investment from each insider, adding to the considerable stakes that they already hold. Zalik holds 64.4 million Class B shares through a limited liability company (LLC), while Sheft has 22.3 million Class B shares through a different LLC as well as roughly 364,000 Class A shares held directly. The company currently has76.4 million Class A shares and 106.2 million Class B shares outstanding.
Class B shares are entitled to ten votes per share, granting insiders with outsized voting power. Zalik previously had 54% voting power, while Sheft and Executive VP Jeffrey Gold have 19% voting power combined, according to GreenSky's most recent proxy statement.
Investors typically view insider purchases as a strong vote of confidence in a company's future prospects. Executives often receive plenty of stock as equity compensation, but it's considered more meaningful when an insider voluntarily invests more out of their own pocket.
GreenSky shares had fallen sharply earlier this month after reporting third-quarter earnings that missed analyst expectations, and it seems that the insiders may be taking advantage of the pullback.