It has been a volatile day for Redbubble shares…
The post Why the Redbubble (ASX:RBL) share price fell 8% today appeared first on The Motley Fool Australia. –
It has been an eventful day for the Redbubble Ltd (ASX: RBL) share price on Thursday.
In early trade, the ecommerce company’s shares were down as much as 8.5% to $3.83.
The Redbubble share price has recovered since then and is now trading just 1% lower for the day at $4.15.
Why is the Redbubble share price bouncing around?
Investors were quick to sell down the Redbubble share price this morning after the company revealed that its Co-Founder, former CEO, and current Chairman, Martin Hosking, has been selling shares.
According to the release, Mr Hosking sold a total of 5 million Redbubble shares on-market on Wednesday for an average of $4.20 per share. This equates to a total consideration of $21 million for the shares.
As we saw recently with insider selling at Dicker Data Ltd (ASX: DDR), this provoked a negative (and potentially unwarranted reaction) from some investors.
Particularly given how Mr Hosking, like David Dicker from Dicker Data, still has a significant holding after the sale.
Why is he selling shares?
Redbubble provided the market with an explanation for the sale. Which, judging by the Redbubble share price recovery, appears to have eased nerves.
It explained: “The sale of shares by Mr Hosking has been undertaken to meet Mr Hosking’s financial commitments. On completion of the sale Mr Hosking will continue to hold an interest in 39.5 million Redbubble shares (representing 14.43% of all issued Redbubble shares), and he will remain as Redbubble’s largest shareholder. Mr Hosking has confirmed he remains committed as a long-term significant shareholder of Redbubble.”
Furthermore, with Redbubble shares down 30% in 2021, Mr Hosking certainly cannot be accused of selling at the top.
Is this a buying opportunity?
The team at Morgans believe the weakness in the Redbubble share price this year is a buying opportunity.
Late last month the broker upgraded the company’s shares to an add rating with a $4.83 price target. This implies potential upside of greater than 20% over the next 12 months.
Should you invest $1,000 in Redbubble right now?
Before you consider Redbubble, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Redbubble wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of August 16th 2021
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.