What’s going on at Cloudflare (NYSE:NET) and ChargePoint Holdings (NYSE:CHPT)? Both are down pretty soundly in Friday afternoon’s trading; CloudFlare is down over 4%, and ChargePoint is down over 5%. Both of these stocks have something in common: someone big on the inside sold fairly large quantities of shares very recently.
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Carl Ledbetter, Director at Cloudflare, sold 9,993 shares of stock valued at around $64.773 per share. That realized Ledbetter—according to SEC filings—around $647,276. Meanwhile, over at ChargePoint Holdings, Director Michael Linse sold 2.3 million shares worth between $5.70 and $5.74 per share. The monster sale netted him around $13.4 million.
Naturally, there are several reasons why insiders would sell stock. They may be rebalancing their portfolios. They may have wanted, or even needed, more liquidity to pursue different opportunities. Maybe Ledbetter wanted to set up a home recording studio so he could finally release his album: “Ledbetter Sings: 50 Great Songs for Flugelhorns.” No one knows but them.
However, one of the most unnerving hypotheticals here is that something under the surface is very wrong, and they’re abandoning the ship before it sinks and takes the value of their stock with it. For Cloudflare, this seems unlikely. Cloudflare just inked a deal with Elon Musk to improve Starlink’s speed. However, ChargePoint Holdings has been in decline for a little while now, and even some new analyst comments couldn’t pick it up off the ground.
For its part, Cloudflare is rated a Hold by analyst consensus, and its $68.42 average price target gives it 8.97% upside potential. Meanwhile, ChargePoint Holdings stock–a Strong Buy–comes with 91.62% upside potential thanks to its average price target of $10.98.