Insiders Buy Over $98 Million in Biotech and Cybersecurity Shares in IPOs

By Trey Thoelcke Published Sep 27, 8:45AM EDT

Quick Read

In the past week or so, a couple of initial public offerings prompted huge insider buying.
However, these were not the only notable insider purchases recently.

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Insiders Buy Over $98 Million in Biotech and Cybersecurity Shares in IPOs — © designer491 / iStock via Getty Images

In the past week or so, some initial public offerings prompted big insider buying. One was a biopharmaceutical company and another a cybersecurity firm, each with beneficial owners scooping up shares. A coal miner also saw one of its directors boosting a stake. And a couple of chief executives made some notable purchases as well.

Let’s take a quick look at these notable transactions in the past couple of weeks.

Is Insider Buying Important?

What does insider buying tell us?

A well-known adage reminds us that corporate insiders and 10% owners really only buy shares of a company because they believe the stock price will rise and they want to profit from it. Thus, insider buying can be an encouraging signal for potential investors. This is all the more so during times of uncertainty in the markets, and even when markets are near all-time highs.

With the second-quarter earnings-reporting season over, insiders are largely free to buy or sell shares until the next season begins. Below are some of the most notable insider purchases that were reported recently, starting with the largest and most prominent.

LB Pharmaceuticals

Buyer(s): three 10% owners
Total shares: about 4.0 million
Price per share: $15.00
Total cost: about $60.0 billion

These buyers purchased LB Pharmaceuticals Inc. (NASDAQ: LBRX) shares in its initial public offering. The New York-based company is focused on treatment of schizophrenia, bipolar depression, and other neuropsychiatric diseases. It added two new members to its board at the time of its IPO.

The stock surged out of the gate to $20.25 but then retreated afterward, and shares were last seen just above the IPO price. The post-IPO low is $14.30 a share.

Note that one of these owners, Deep Track Biotechnology Master Fund, recently sold shares of Dynavax Technologies Corp. (NASDAQ: DVAX).

Netskope

Buyer(s): 10% owner ICONIQ Strategic Partners VI and a director
Total shares: 6.0 million
Price per share: $19.00
Total cost: $38.0 million

Cloud-based security company Netskope Inc. (NASDAQ: NTSK | NTSK Price Prediction) also just had an IPO, and its shares also surged before pulling back. The CEO has said that the purpose of going public was to raise awareness about the company and boost its credibility. The IPO raised over $900 million, and the company was valued at $7.2 billion.

Note that the beneficial owner is a fund focused on investing in fast-growing enterprise software, financial technology, and data center companies, particularly those it describes as using a “picks and shovels” approach to artificial intelligence.

Alpha Metallurgical Resources

Buyer(s): a director
Total shares: 108,000
Price per share: $140.89 to $157.19
Total cost: over $16.0 million

This purchase came after Alpha Metallurgical Resources Inc. (NYSE: AMR) posted better-than-expected quarterly results and at least one analyst reaffirmed a Buy rating on the stock. The Tennessee-based coal mining company has been cutting costs, and there is speculation that it may resume buying back shares.

The stock is 34.5% higher since the earnings report but still down 16.1% year to date. Shares were last seen 3.6% higher than the top director’s purchase price range. The $167.50 consensus target indicates that analysts anticipate 6.6% upside in the next 12 months.

Note that a couple of officers sold some shares last month, following the earnings report.

And Other Insider Buying

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These were not the only notable insider purchases of the past week or so. Here’s a quick look at some others.

Stock	Buyer	Shares	Price	Cost
NextDecade Corp. (NASDAQ: NEXT)	various	almost 1.5 M	$6.41 to $7.22	almost $10.3 M
WaterBridge Infrastructure LLC (NYSE: WBI)	two directors	375,000	(IPO) $20	$7.5 M
Marvell Technology Inc. (NASDAQ: MRVL)	CEO and others	27,200	$76.96 to $78.03	about $2.1 M
Prospect Capital Corp. (NASDAQ: PSEC)	CEO and director	761,000	$2.66 to $2.79	over $2.0 M

Recently, some smaller insider buying was reported at Archrock, Freshpet, Matador Resources, MicroStrategy, and TKO Group as well.

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About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.