Boston, MA 06/05/2014 (wallstreetpr) – Developer of telecommunications services for Internet Protocol 8×8, Inc. (NASDAQ:EGHT) shares witnessed insider trading after the announcement of its fourth quarter results on May 21. The company’s chief executive officer has acquired shares throwing various opinions about the move.
Insider Trading
On May 27, the company’s CEO Verma Vikram has acquired 38K shares at the rate of $7.42. This transaction has boosted his holding to 163K shares. This suggests that the CEO’s action represented hiking his stake by about 30%, as a result, of the latest acquisition of shares.
While Verma Vikram has not disclosed the reason behind in buying the shares of 8×8, it does appear that he might have taken advantage of the prevailing stock price considering that the stock had hit a 52-week high of $12.42. Alternatively, his move could also pave the way for bringing back the investors to the counter by keeping it alive as the stock has nosedived more than 25% in the current calendar year alone.
Despite8x8, Inc. (NASDAQ:EGHT)’s adjusted earnings beating the Street analysts’ estimations, the stock plunged 8.5% on May 22 to $7.33 from $8.01 with a volume of 4.99 million shares. The CEO’s action on May 27 allowed the stock to close higher compared to May 23 and managed to maintain with either a slender gain or loss until May 30. However, until June 4 closing, shares of the company dropped further 9.6% and on June 4 alone, the stock dropped 3.6%. The stock has also slipped below the 200-day moving average indicating the bears control over the counter.
Possible Reasons For Selling
Though 8×8, Inc. (NASDAQ:EGHT) delivered adjusted net earnings of $3.3 million or 4 cents a share for the fourth quarter, which is above the Street predictions of 3 cents a share, it is not enough to keep the sentiments high. Its total revenue advanced 29% to $35.8 million during the same period.
However, bulls hammering continued to haunt the stock probably due to some analysts reducing their expectations of earnings of 8×8. While the immediate impact of the insider trading is restricted only for a few days, it remains to be seen whether the stock will take a further beating in the absence of clear cut catalyst to lift the sentiments.
