Corporate executives and directors tend to have superior information in relation to their firms’ operating activities. If these insiders are buying company stock, it’s generally a bullish signal.
Here, we are going to put the spotlight on an insider trade made by a Director at Twilio Inc (TWLO:US). Twilio is a US technology company that provides a cloud communication platform to its clients globally. Using its web service application programming interface, software developers are able to customize the way businesses can communicate with their clients automatically. It’s traded on the New York Stock Exchange and currently has a market capitalization of $51.8 billion.
Twilio Inc: Insider Buying
Our data shows that on November 11, a Director at Twilio Inc, Jeffrey Immelt, bought 3,400 TWLO shares at a price of $295.82 per share. This purchase cost the Director around $1 million and increased his holding in the company by about 25%.
High Profile Background
We think it’s very interesting that a Director with Immelt’s profile is buying company stock. Previously, Immelt was CEO of General Electric for 16 years and was named as one of the ‘World’s Best CEOs’ by Barron’s on three occasions. He is currently a Venture Partner at New Enterprise Associates where he works within the healthcare and technology investing teams. This suggests he is very capable of spotting an investment opportunity.
What stands out about this purchase is that it is extremely large in monetary terms and it has also increased Mr. Immelt’s holding by a large percentage. It signals to the market that Mr. Immelt is very confident in the prospects of Twilio
Strong Active Customer Growth
Twilio produced an encouraging set of Q3 2021 results.
The third-quarter revenue figure of $740.2 million was up 65% year over year. And at the end of September, the company had more than 250,000 active business accounts, which was up from 208,000 active business accounts at the end of September 2020.
During the quarter, the company announced a number of new exciting projects including Twilio Engage, Twilio Live, and Twilio X – a next generation messaging platform. These new platforms will ensure that the company can continue to grow at a fast pace. The company provided guidance of $760-$770 million in revenue for Q4 which would be 39-40% higher than the levels achieved in Q4 2020.
“We delivered another quarter of strong growth at scale in the third quarter as companies continue to turn to Twilio in this digital-first world. We are extremely excited about the next generation of our customer engagement platform, and our newest pillar, Twilio Engage, which will allow companies of all sizes and in any industry to build and optimize hyper-personalized marketing campaigns on every channel for customer acquisition, conversion and retention,” said Jeff Lawson, Twilio’s co-founder and CEO.
On the back of the high levels of revenue growth at Twilio in Q3 and an exciting outlook for the business, we see the insider buying as bullish. In spending $1 million on stock, Mr. Immelt is signaling that he is optimistic that the share price will move higher in the future.