Is Fastly Stock a Buy or Sell After Its CTO Dumped 40,000 Shares?
Fastly operates at scale as a provider of edge cloud infrastructure, enabling rapid, secure, and programmable digital experiences for global enterprises.
The company leverages a differentiated platform focused on performance, security, and developer flexibility, targeting customers with demanding content delivery and application security needs.
Fastly's strategy centers on expanding its programmable edge capabilities to capture growth in digital transformation and cloud-native application delivery.
What this transaction means for investors
Fastly CTO Artur Bergman's sale of 40,000 shares is not a warning sign. It is part of an established Rule 10b5-1 trading plan. Corporate executives often set up such plans to prearrange trades in order to avoid accusations of acting on insider information.
In this case, Mr. Bergman's sale comes at a time when Fastly shares were on an upswing. The stock reached a 52-week high of $12.59 on Dec. 2, a few weeks before his disposition.
Fastly stock rose because of the company's strong third quarter results. The tech provider achieved record revenue of $158.2 million, up from the prior year's $137.2 million.
Although the company is growing sales, it isn't profitable. Fastly had an operating loss of $28.8 million in Q3. That said, its losses are shrinking, with its Q3 sum a drop from the operating loss of $40.6 million in Q3 of 2024.
Overall, Fastly looks like it's headed in the right direction. But because Fastly stock is up, its price-to-sales ratio is elevated compared to where it was at for most of the past year. This makes now a good time to sell, but not to buy. Wait for the stock price to drop before deciding to pick up shares.
Glossary
Open-market sale: The sale of securities on a public exchange at current market prices, not through private transactions.
SEC Form 4: A required filing that discloses insider trades of a company's stock by officers, directors, or major shareholders.
Direct holdings: Shares owned personally and registered in the individual's name, not through intermediaries or trusts.
Indirect holdings: Shares owned through entities such as trusts or funds, rather than directly by the individual.
Trust entity: A legal arrangement where assets are held by one party for the benefit of another, often used for estate or tax planning.
Weighted average purchase price: The average price paid per share, weighted by the number of shares in each transaction.
Option exercise: The act of using a stock option to buy or sell shares at a set price.
Derivative securities: Financial contracts whose value is based on the price of an underlying asset, such as options or futures.
Disposal: The act of selling or otherwise getting rid of an asset or security.
Economic exposure: The total financial interest an individual has in a company, including both direct and indirect holdings.
Cadence (trading cadence): The typical frequency or pattern of trades made by an individual or entity.
TTM: The 12-month period ending with the most recent quarterly report.
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Robert Izquierdo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Fastly. The Motley Fool has a disclosure policy.
Is Fastly Stock a Buy or Sell After Its CTO Dumped 40,000 Shares? was originally published by The Motley Fool
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