Impact and Interpretation of Form 144 Insider Selling Intentions on NETSKOPE (NTSK) Stock Price

NETSKOPE (NTSK) completed its IPO in September 2025 at an offering price of $19 per share, with a valuation of approximately $7.3B, and rose 18% on its first day of trading [1][2]. As of the close on December 31, 2025, NTSK’s stock price was $17.54, a decrease of about 7.7% from the offering price, with a 52-week high of $27.99 [0].

• Form 144 is a “Notice of Proposed Sale of Securities”, usually submitted before or at the time of placing an order/selling; it discloses the “proposed sale” intentions and conditions of insiders/affiliates above the specified scale threshold, and does not confirm the actual trading volume [3][4][6].
• Trigger conditions (within 3 months):
  • Selling more than 5,000 shares, or
  • Selling amount exceeding $50,000 [4][6].

• Form 144: Previews the scale and conditions of the “proposed sale” and does not mean the transaction has been completed [3][6].
• Form 4: Submitted after the transaction is executed, reporting the actual number of shares sold and the price [3].

• The validity period of a Form 144 notice is up to 3 months; if the proposed sale period is longer or conditions change, it needs to be resubmitted [4].

• Rule 144 prevents insiders from dumping large volumes to depress prices through holding periods, trading volume limits, etc. [3][5]. The maximum trading volume is the larger of the following two [5][6]:
  • 1% of the outstanding securities of the same type, or
  • The average weekly trading volume in the 4 weeks before submitting Form 144.
• For IPO companies like NTSK with small to medium free float, if multiple insiders disclose Form 144 almost at the same stage (especially near the lockup expiration), it may increase “potential” supply expectations and order depth in the short term, testing liquidity [3][4].

• Some investors view Form 144 as a bearish signal because insider selling may be interpreted as reduced confidence [3]. However, insiders have various motives for selling: asset allocation, tax planning, liquidity needs, etc., which do not necessarily reflect weakening fundamentals [3][4].
• A single Form 144 does not necessarily convey a negative signal; more critical factors are the scale of the sale, frequency, and timing (e.g., before or after earnings reports, guidance, product or strategic milestones) [3][4].

• Search results show that some insiders of NTSK disclosed Form 144 near the lockup expiration [7] (this disclosure is a “proposed sale notice” and does not necessarily result in immediate transactions). During this phase, if multiple insiders disclose Form 144 intensively, it will amplify market expectations of increased supply, easily triggering short-term volatility or selling pressure [3][4].

• Common neutral/reasonable motives:
  • Tax and cash flow (option exercise, withholding tax/tax burden management)
  • Risk management and asset allocation (reducing single asset concentration)
  • Personal liquidity needs
• Signals to be alert to:
  • Sale scale far exceeding historical or industry norms
  • Multiple insiders disclose Form 144 intensively, overlapping with major negative company news, downward revisions of performance guidance, etc.
  • Frequent, continuous “proposed sale” disclosures accompanied by a large proportion (e.g., a significant share of their holdings or the company’s float)

• Compare history and peers: Check the historical disclosure and execution of the person/related entity, and compare with insider behaviors of comparable companies in the industry [3][4].
• Pay attention to timing: Whether the disclosure is related to the overvalued stage of the stock price, completion of major milestones, industry inflection points, or company-specific events [4][5].
• Cross-verify with other signals:
  • Insider “buying” (actual increase in holdings shown in Form 4) has more positive signal significance
  • Company repurchase plans, changes in equity incentives and compensation plans, capital expenditure/financing rhythm, etc.

• Compare Form 144 (proposed sale notice) with Form 4 (actual transaction) to verify the actual number of shares traded and price, to determine whether the “proposed sale” is implemented and the execution rhythm [3].
• Backward analysis of NTSK and related insiders’ disclosure history can be done using SEC EDGAR or third-party professional data tools.

• Fundamentals: Pay attention to NTSK’s revenue growth rate, gross margin/operating leverage, expense ratio, cash flow and free cash flow, customer structure and retention rate, industry competition and product roadmap, etc., to determine whether the sale is related to changes in business fundamentals [1][2].
• Technicals: NTSK is currently in the middle to lower range of its 52-week interval ($17.54 vs. 52-week high of $27.99). Combine changes in trading volume, key support/resistance levels, technical indicators, and market sentiment to assess the probability of short-term volatility and downside potential [0].

• After NTSK went public, its stock price fell from the IPO price of $19 to $17.54 (about -7.7%) and has回调 significantly from its 52-week high, indicating partial profit-taking and adjustment of market sentiment [0].
• Search results show that some insiders of NTSK disclosed Form 144 before and after the lockup expiration (a proposed sale notice, not necessarily an immediate transaction) [7], which is not uncommon among IPO companies, but may amplify “potential” supply concerns in the short term.
• Strategic recommendations:

1. Track and verify the consistency and execution rhythm between actual execution (Form 4) and proposed sale disclosure (Form 144) [3].
2. Prioritize decisions based on the company’s fundamentals and technicals, and avoid overinterpreting a single Form 144 [3][4].
3. Pay attention to corporate governance, quality of information disclosure, and market communication and rhythm management related to the lockup period.
4. If proposed sale disclosures are concentrated and large-scale, moderately increase expectations for short-term volatility and liquidity risks, and evaluate positions and risk exposure.

[0] Jinling API Data
[1] CNBC - “Netskope prices IPO at $19, valuing company at $7.3 billion” (https://www.cnbc.com/2025/09/17/netskope-seeks-7point3-billion-valuation-as-it-prices-shares-at-19.html)
[2] CNBC - “Netskope soars 18% on first trading, reaches $8.6 billion market cap” (https://www.cnbc.com/2025/09/18/netskope-ipo-stock-nasdaq-ntsk.html)
[3] EquityList - “Rule 144 Explained: A Complete Guide to Selling Restricted Stock” (https://www.equitylist.co/blog-post/rule-144-guide)
[4] Investopedia - “Essential SEC Filings for Investors: Key Forms Explained” (https://www.investopedia.com/articles/fundamental-analysis/08/sec-forms.asp)
[5] Carta - “Rule 144 Explained: Conditions, Holding Periods, and Volume Limits” (https://carta.com/learn/startups/equity-management/rule-144/)
[6] Finrep.ai - “Form 144: The Untold Story of Restricted Stock Sales” (https://finrep.ai/blog/form-144-the-untold-story-of-restricted-stock-sales)
[7] SEC Form 144 filing image - Benjamin Sun (Sun Brothers LLC) (https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20250910/1757450916035757667)