In-Depth Analysis of SEC Form 144: Insider Stock Sale Notice

Form 144 is an

required by the U.S. Securities and Exchange Commission (SEC). It must be filed when a company insider plans to sell stocks exceeding any of the following thresholds :

• 5,000 shares
  or
• Securities worth
  $50,000
  [1]

• Company executives, directors
• Shareholders holding more than 10% of the shares
• Affiliated persons holding restricted stocks or control securities

Feature	Form 144	Form 4
Nature	Sale Intent Notice (proposed sale plan)	Actual Transaction Completion Report
Submission Timing	At the start of the sale plan (before sale)	Within 2 business days after transaction completion
Information Content	Expected scale and time period	Actual transaction price, quantity and method
Update Obligation	Resubmission required if plan not completed within 90 days	Must be filed for each actual transaction

Form 144 is only a . Insiders may eventually not sell all stocks as planned, or even not sell at all. Actual transactions must be reported via Form 4 [2].

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According to research from professional analysis platform TIKR,

, but should be regarded as [3]. Its value is reflected in the following aspects:

• When multiple executives submit Form 144
  concentratedly within a short period
• The sale scale accounts for
  more than a double-digit percentage
  of the insider’s total shareholding
• The sale coincides with the deterioration of the company’s fundamentals (e.g., profit margin contraction, free cash flow decline) [3]
• When the lock-up period after IPO ends, Form 144 can help assess the potential selling pressure scale [2]

• Regular sale plan of a single executive
• Sales based on preset 10b5-1 trading plans (the proportion of such automated sales has risen from 22% in 2022 to 39% in 2024) [1]
• Automatic tax-withholding sales in RSU vesting events
• ‘Sell-repurchase’ transactions after option exercise (usually only for tax payment) [3]

Form 144 may imply

, especially in the following cases:

• Large-scale Form 144 submissions after the end of the IPO lock-up period
• Multiple executives of high-valued companies such as tech stocks disclose sale plans in a concentrated manner
• Market analysts can estimate the possible price pressure range based on this [2]

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Sale Type	Signal Strength	Identification Method
Voluntary Public Market Sale	⚠️ High	Transaction code in Form 4 is usually ‘S’
10b5-1 Preset Plan	⚡ Low/Neutral	The plan was established months before the sale
RSU Vesting Tax Withholding	⚡ Low/Neutral	Time is usually fixed to the grant cycle
Option Exercise Tax Payment	⚡ Low/Neutral	Focus on net effect (whether shareholding increases after exercise)

If an insider sells a similar amount in the same week every quarter, it is likely a plan-driven activity. Only when this (e.g., surge in scale, synchronization of multiple executives, abnormal timing) is it worthy of high attention [3].

A $2 million sale is significant for a mid-level vice president but negligible for a founder CEO worth billions.

• Percentage of sale to personal total shareholding
  (double-digit decline signals are stronger)
• Remaining shareholding after sale
  (Form 4 will disclose post-transaction ownership)
• Historical comparison
  (whether the insider was a net seller in the past 6-12 months) [3]

• Multiple executives such as CEO, CFO, CTO submit Form 144
  各自 within 1-2 weeks
• The sale scale accounts for a significant proportion of their respective shareholdings
• Coincides with the timing of the company’s
  performance warning and deterioration of financial indicators

Form 144 Signal	Company Fundamentals	Valuation Level	Comprehensive Judgment
Large-scale sale by executives ✅	Profit margin deterioration ✅	Historical high ✅	⛔ Strong Sell Signal
Large-scale sale by executives ✅	Solid fundamentals ⚡	Reasonable range ⚡	🔄 Neutral/Watch
Large-scale sale by executives ✅	Strong growth 🟢	Undervalued 🟢	🟢 May be Just Diversification/Liquidity Needs

1. Check the company’s latest
   profit margin, free cash flow, and performance guidance trends
2. Compare current valuation with
   historical valuation range and peer companies
3. Check if it coincides with events such as
   lock-up expiration, M&A restructuring, equity incentive expiration
   [3]

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• Truth:
  Insider sales often stem from
  neutral reasons
  (diversifying portfolio, tax planning, home purchase, charitable donation, etc.), rather than judgment on the company’s prospects [3]

• Truth:
  Form 144 is only an
  intent statement
  . Actual execution needs to be tracked via Form 4. It may be partially executed or not executed at all within the 90-day window

• Truth:
  About
  39%
  of Form 144 submissions in 2024 are related to 10b5-1 preset plans, which are regular risk management behaviors [1]

• Use Form 144 as an
  early warning signal
  to trigger deeper fundamental analysis
• Focus on
  abnormal sale behaviors that deviate from historical patterns
• Use professional platforms (e.g., TIKR) to cross-validate insider trading data with financial indicators and valuation trends [3]
• Prioritize
  Form 4 actual transactions
  over Form 144 plans

• Make buying/selling decisions based solely on a single Form 144 filing
• Ignore the background of 10b5-1 plans and treat all sales as voluntary decisions
• Confuse the nature of restricted stocks (need to wait for holding period to end) with publicly traded shares

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1. Frequency and Scale
   : Multiple executives submit within a short period, accounting for a significant proportion of their respective shareholdings
2. Historical Pattern
   : Breaking regular sale cycles (e.g., quarterly regular to sudden concentrated)
3. Company Events
   : Whether it coincides with earnings release, guidance adjustment, or strategic change
4. Industry Background
   : Whether peer companies have similar insider trading trends
5. Liquidity Pressure
   : Timing of supply shocks such as IPO lock-up expiration, additional share issuance lock-up expiration

• SEC EDGAR Database
  : Directly search for original Form 144 documents
• Professional Platforms
  : TIKR, Bloomberg Terminal, etc., provide insider trading visualization and fundamental correlation analysis
• Aggregation Services
  : Such as The Washington Service tracking Form 144 data trends [1]

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The

—it allows the market to understand potential insider selling pressure in advance. However, its predictive ability as an , and it should be used in combination with other analytical tools:

1. Priority Order
   : Fundamental analysis (financial health, growth prospects) → Valuation rationality → Insider trading signals
2. Weight Allocation
   : Treat Form 144 as an
   auxiliary indicator
   , and raise the warning level when multiple factors resonate
3. Dynamic Tracking
   : Focus on the conversion rate from Form 144 (intent) to Form 4 (execution) and actual market impact

Investment Wisdom

: Great investment decisions are based on a deep understanding of the company’s intrinsic value. Insider trading signals (whether buying or selling) should be tools to verify rather than replace fundamental research. When the market overreacts to one-sided insider signals, it often breeds contrarian investment opportunities—provided that your fundamental analysis is solid enough.

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[1] Morgan Stanley at Work - “2025 10b5-1 Plan Trends Report” (https://www.morganstanley.com/atwork/articles/10b5-1-trading-plan-trends-report)

[2] Investopedia - “Essential SEC Filings for Investors: Key Forms Explained” (https://www.investopedia.com/articles/fundamental-analysis/08/sec-forms.asp)

[3] TIKR - “How to Track Whether Insiders are Selling Their Stock” (https://www.tikr.com/zh/blog/how-to-track-whether-insiders-are-selling-the-stock)

[4] WallStreetMojo - “SEC Form 144 - What Is It, Examples, Vs Form 4” (https://www.wallstreetmojo.com/sec-form-144/)

[5] Investopedia - “Understanding SEC Rule 144: Resale of Restricted Securities” (https://www.investopedia.com/terms/r/rule144.asp)

[6] ARC Group - “SEC Rule 144: Selling Restricted and Control Securities” (https://arc-group.com/sec-rule-144-restricted-control-securities-capital-markets/)

[7] EquityList - “Rule 144 Explained: A Complete Guide to Selling Restricted Stock” (https://www.equitylist.co/blog-post/rule-144-guide)