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Insider Buys LiveXLive Media Shares

LiveXLive Media Inc (NASDAQ:LIVX) was trading 2.7% lower from the previous closing price.

Benzinga · 08/21/2020 15:34

LiveXLive Media Inc (NASDAQ:LIVX) was trading 2.7% lower from the previous closing price. A Form 4 filing filed with the SEC on Friday, August 21 showed that & Chairman Ellin Robert S bought 1,900 shares at $2.96 on Wednesday, Aug 19, and bought 3,300 shares at $2.91 on Thursday, Aug 20.The transaction moved the executive's stake in LiveXLive Media Inc. to 1,425,146 shares.

The Importance of Insider Transactions

While transactions from an insider shouldn't be used as the sole item to make an investment or trading decision, an insider buying or selling stock in their company can be a good added factor that leads to more conviction in a decision.

When an insider buys stock after an important sell off, that can indicate the insider's faith in the success of the organization. Henceforth, if the stock is bought at new highs, it might be because the insider feels that the stock is not overvalued. Insiders who sell stock at new lows could be anticipating some capitulation moment. If the insider sells at new highs, it could point to the intention to "take some profit" and "lock in a gain."

Transaction Codes To Focus On

Investors prefer focusing on transactions which take place in the open market, indicated in the Form 4 with codes P for purchase and S for sale. An open-market transaction means the insider went into the market of their own volition and made an active decision about the potential path for a company and its stock moving forward.

Transaction codes other than P or S are often viewed with less conviction as they are often not tied to a decision by the exec. As an example, transaction code C indicates the conversion of an option. Transaction code A indicates the insider may have been forced to sell shares in order to receive compensation the exec was promised upon being hired by a company.