Corporate insiders know their companies more intimately than anyone else. They also have access to real time information that outsiders are unlikely to be aware of. If they’re buying stock, it is generally a positive development.
Here, we are going to highlight a large insider purchase at Rideshare Rental Inc (YAYO:US) which was formerly known as Yayyo Inc. Rideshare Rental is engaged in developing a vehicle renting platform in the US. It operates the Rideshare Platform, an online peer-to-peer booking platform, and manages a fleet of passenger vehicles to be rented directly to drivers in the ridesharing economy. It’s traded over the counter in the USA and currently has a market capitalization of $70 million.
Rideshare Rental Inc: Insider Buying
Form 4 filings show that between 15 January and 25 January, a major shareholder with significant influence at Rideshare Rental, John Gray, purchased 458,184 YAYO shares at a price of approximately $1.60 per share. This purchase cost the insider approximately $736,000.
This insider purchase is interesting for a couple of reasons. Gray is an early-stage investor who has loaned the company money for expansion and is already one of the top shareholders in Rideshare Rental through his Gray Mars Venus Trust. He is also an influencer and writes a column that has over 30 million readers in the US.
Additionally, this is a substantial purchase by the insider in monetary terms. It suggests he is very confident in the future prospects of the company.
Rideshare Rental saw record revenue in Q3 2020 with revenue rising 21% year over year. Gross margin was 42% which was up from 38% in Q3 2019. The company has benefited from Proposition 22, a law in California that gives gig workers, such as ride-hailing and food delivery drivers, full employee benefits.
The CEO commented: “We anticipate seeing continued growth in revenue as we add more cars, demand is strong not only in California but also in all cities we service. We are running at a 95% utilization rate on available cars to rent in all areas.”
Given this latest positive update, we see the insider buying here as a bullish signal. It suggests that the insider believes there is further growth in the share price to come.