Some Figma, Inc. (NYSE:FIG) shareholders may be a little concerned to see that the Chief Technology Officer, Kris Rasmussen, recently sold a substantial US$1.8m worth of stock at a price of US$24.86 per share. However, that sale only accounted for 0.7% of their holding, so arguably it doesn't say much about their conviction.

Figma Insider Transactions Over The Last Year

In fact, the recent sale by Chief Technology Officer Kris Rasmussen was not their only sale of Figma shares this year. They previously made an even bigger sale of -US$6.8m worth of shares at a price of US$31.52 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$22.20. So it is hard to draw any strong conclusion from it.

In the last twelve months insiders purchased 222.50k shares for US$7.3m. On the other hand they divested 702.53k shares, for US$24m. Over the last year we saw more insider selling of Figma shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Does Figma Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Figma insiders own 16% of the company, currently worth about US$1.8b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Figma Insiders?

Insiders sold Figma shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 2 warning signs with Figma and understanding these should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.