Shares of Curiositystream (CURI -3.27%), a streaming service for educational video content, popped on Thursday, after its founder and chairman increased his ownership stake in the company. As of 10 a.m. EST, the stock was up 14%.
According to yesterday's filing with the Securities and Exchange Commission (SEC), chairman John Hendricks bought 74,000 shares of Curiositystream stock. This increased his directly held position by 9%. He now owns almost 900,000 shares directly and over 20 million shares indirectly through Hendricks Factual Media LLC.
To many investors, this is a very bullish signal. After all, if an insider is buying stock, it could mean the business is doing very well. However, investors would do well to keep this buy in context. Hendricks was able to acquire his 74,000 new shares at $13.50 by exercising an option. Considering Curiositystream stock trades well above $13.50, it could just be a smart financial move on his part.
The point is, we don't always know all the motivations for an insider to buy or sell stock in their own companies, so these things should always be taken with a grain of salt. That said, it's always encouraging when the people running the company are in the same boat as common shareholders. Hendricks owns over 10% of Curiositystream, and that's good. It doesn't necessarily mean this growth stock will be a long-term winner; it simply means he shares much of the same financial incentive as shareholders going forward.