You can learn a lot by watching how corporate insiders handle positions in their own companies. People may sell for many reasons (such as buying a house, paying for college, or estate planning). Yet, they generally buy for only one reason: to make more money.
The chief executive officer is often one of the largest and best-informed shareholders in any company. Let’s see whether Shift4 Payments Inc. (NYSE: FOUR) CEO Jared Isaacman has been increasing or decreasing his shares over the past year and whether he knows something we don’t.
What You Need to Know About Shift4 Payments
Shift4 Payments provides software and payment processing solutions in the United States. It offers omnichannel card acceptance and processing solutions, including credit, debit, contactless card, Europay, Mastercard and Visa, QR Pay, and mobile wallets, as well as alternative payment methods.
It also provides:
- Merchant acquiring
- Proprietary omnichannel gateway
- Complementary software integrations
- Integrated and mobile point-of-sale (POS) solutions
- Security and risk management solutions
- Reporting and analytical tools
Offerings include webstore design, hosting, shopping cart management, and fulfillment integration, as well as tokenization, payment device, and chargeback management, fraud prevention, and gift card solutions.
The company’s VenueNext provides mobile ordering, countertop POS, and self-service kiosk services, as well as digital wallets to facilitate food and beverage, merchandise, and loyalty for stadium and entertainment venues. Its Shift4Shop offers an e-commerce platform that provides everything a merchant needs to build a business online. In addition, Shift4 provides Lighthouse, a cloud-based business intelligence tool that includes customer engagement, social media management, online reputation management, scheduling, and product pricing, as well as reporting and analytics.
SkyTab POS is a POS workstation preloaded with software suites and integrated payment functionality, while SkyTab Mobile is a mobile payment solution. The company offers marketplace technology for integrations into third-party applications. Additionally, it provides merchant underwriting, onboarding and activation, training, risk management, and support services, as well as software integrations and compliance management, and partner support and services.
The company was founded in 1999 and is headquartered in Allentown, Pennsylvania. That is also the home of electricity producer PPL Corp. (NYSE: PPL). Competitors of Shift4 Payments include Block Inc. (NYSE: SQ) and Fiserv Inc. (NYSE: FI). Isaacman has been CEO since he founded the company, and he is also chair of the board of directors.
The company reported almost $2.4 billion in revenue and has a market capitalization of about $6.4 billion. The stock has gained about 12% in the past year, underperforming the Nasdaq and the S&P 500 in that time. However, the stock is up about 123% since its initial public offering in 2020.
How the CEO of Shift4 Payments Is Trading
One year ago, Isaacman owned 4.15 million shares, worth almost $185.2 million. Today, he owns more than 2.19 million shares, which is a stake of less than 4%. Despite the stake being cut almost in half, the share price gain meant the value of it shrank by only about 14% to around $159.2 million.
| Shares a Year Ago | Shares Today | % Change |
| 4,150,583 | 2,193,870 | −47.14% |
CEO Jared Isaacman could have sold shares for a variety of reasons, and we may never know the truth. Could it be that the stock’s recent underperformance is expected to continue, or worse deteriorate? Seems unlikely given its overperformance since its 2020 IPO. The consensus price target indicates that analysts see 13% upside potential in the next 12 months.
Another internal shareholder to watch is Jordan Frankel, the company’s general counsel. He owns almost 0.3% of shares outstanding, worth about $11.8 million. Chief Financial Officer Nancy Disman just parted with 10,000 shares, reducing her stake to a little more than 263,000. Note that both Frankel and Disman were among a handful of insiders who were selling shares back in November. (These 19 executives pay themselves over $150 million a year.)
The next quarterly report is expected later this month or in early March. By then, insiders will be prohibited from buying or selling shares. It could be instructive to see how the report comes out and how insiders react afterward.
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