Recently IPO'ed Earth-imaging satellite company Planet Labs PBC (PL -5.44%) had a terrible fall last week. Despite reporting sales in line with expectations, the company's gross profit margins on those sales appeared to fall short, and guidance wasn't strong enough to offset the damage.
Planet Labs stock plunged 22.1% in a single day, and has drifted lower since. Today, however, shares are taking a turn for the better, and were up 13.5% as of noon ET. The hike could be a response to reports the company's CEO has spent just under $125,000 on Planet Labs stock.
As StreetInsider.com reports today, CEO William Marshall has just filed a Form 4 with the Securities and Exchange Commission advising that yesterday, he spent just under $125,000 to acquire 19,230 shares of Planet Labs.
The CEO's purchase follows reports of similar spending by board of directors member Niccolo di Masi (who spent $245,000 buying up Planet stock) and its president of product and business, Kevin Weil, who bought about $100,000 in stock.
Are all these purchases mere window dressing for Planet Labs: purchases intended to be seen by outside stockholders, with the goal of boosting confidence in the stock, and boosting the stock price?
Maybe they are, but even so, the plan seems to be working. And it's good to see Marshall putting even more of his own money on the line, and growing his stake in Planet Labs to 5.3% of all shares outstanding, now that the stock is down about 35% from before its SPAC IPO. Taken at face value, the purchases do seem to indicate that the CEO is optimistic -- a lot more so than a bunch of insider sellers would be.
Still, yesterday's purchases only increase the CEO's stake in the company by 0.14%. For outside investors, the best evidence that Planet Labs stock is undervalued would be even more purchases by even more of the company's insiders as the price continues to rise.