Shares of Box, an enterprise collaboration shop, traded sharply higher today following news that the company’s CEO, Aaron Levie, recently purchased 15,000 shares.
At a price, according to an SEC filing, of $11.1 per share, the dollar amount of the trade is not large, but its impact has been more than symbolic. Disclosure of the $166,500 purchase helped push shares of Box north by 6.85 percent, as of the time of writing. That jump represents tens of millions of dollars of value.
Box has been a tricky company to track over the past few years. From its initial filing, to its delayed IPO, to its very successful IPO, and through its continued descent as a public company, Box has largely done what it said that it would — aggressively expand its revenues, improve margins over time, and get to cashflow breakeven by its fiscal 2018.
And yet, despite boosting its full-year revenue guidance consistently and the like this year, its shares have steadily eroded in value.
Why? There are two things at play, one of which you can’t pin on Box, and one that you can. The first is that market sentiment has shifted. The appetite for growth at the cost of massive cash burn as a public company is simply smaller than it was.
The second is the following: Increasing GAAP net losses. You can argue that investors are more concerned about cash burn than losses that include non-cash costs, but shareholders often have to recoup those costs later through share repurchased. Box still loses quite a lot of money. Again, that is part of its stated plan, but it remains a stubborn fact.
Regardless, Box executives are bolstering their company by speaking with their wallets. Bullshit aside, betting on your team with your own money is always a strong signal.