The Trade Desk (TTD +1.44%) has suffered through a massive decline over the last 16 months. Since its peak in December 2024, the stock has fallen by almost 85%.
It is under such conditions that CEO Jeff Green bought nearly 6.4 million shares of the media stock, a purchase of approximately $150 million. That is a notable purchase by nearly every measure, and investors should not ignore it for this key reason.
Image source: The Motley Fool.
Why Green's purchase of The Trade Desk is significant
Green's purchase of The Trade Desk stock is notable because insiders only buy their stock when they believe it will rise.
As the co-founder, chairman, and CEO of this company, Green has a huge stake in its success. He founded the company in 2009 to capitalize on the growing need for a digital ad platform where companies and ad agencies could initiate and manage digital ad campaigns.
The stock delivered market-beating returns up until early 2025, when the company missed its own revenue estimate. Some customers balked at its AI-driven Kokai platform, which had glitches and stripped away features they had liked from its previous platform, Solimar. Even worse, large advertisers began to wall off their platforms, making it more difficult for The Trade Desk to manage ad campaigns involving such platforms.
NASDAQ: TTD
Key Data Points
However, Green went so far as to publish an op-ed in The Current explaining his decision. He feels Wall Street is wrong about his company, believing the open internet will make a comeback. He also touted the launch of OpenTTD, which enables companies in its ad-tech ecosystem to innovate and build their business by leveraging The Trade Desk's platform.
Even without considering Green's stock purchase, one also has to wonder whether the sell-off has gone too far. The Trade Desk's $2.9 billion in revenue for 2025 grew by 18%. That was slower than the 26% growth rate in the previous year, but it is growth, nonetheless. Also, net income of $443 million grew at a slightly slower 15% rate, but only because a spike in income tax expenses led to the smaller increase.
Moreover, its P/E ratio has fallen to 25. That is also below the S&P 500 average of 30 and implies it is being valued like a dying business.
Should investors buy?
When looking at Green's purchase from an investor perspective, it could be an indication to buy the stock. Despite its recent challenges, it has delivered steady revenue and income growth, and the aforementioned 25 P/E ratio could arguably mean it has become a bargain.
Despite Green's explanation of the purchase, the investment is a speculative buy, and even an insider could be misguided. Thus, for risk-averse investors, staying on the sidelines could be the best course of action.
However, The Trade Desk has shown signs that investors could benefit from a massive turnaround, and its valuation has become reasonable. Those are arguably excellent reasons for risk-tolerant investors to open a starting position in The Trade Desk stock to add to as the turnaround narrative hopefully pans out.
