Form 144 Filings

What is a Form 144?

A Form 144 is a document filed with the SEC by any holder of restricted stock who intends to sell those shares. The filer is then permitted, but not required, to sell the restricted shares at any time within 90 days after the Form 144 is filed.  Form 144s are public filings; however, the vast majority of forms are not available on EDGAR as they are filed on paper with the SEC.

For the purposes of analyzing insider trading, we consider Form 144s as an "intent to sell," indicating that an insider wants to have the opportunity to sell shares over the next three months. While less of a definitive signal than a completed sale, Form 144 filings can shed light on how a insiders value their companies.  The second page of these filings also includes information on how the shares were acquired and sales sold by the insider in the past three months.

Why do insiders hold restricted stock?

People can hold restricted stock for a variety of reasons that differ from company to company. Following are two of the more common reasons:

(1) options granted to insiders become restricted stock when exercised;

(2) original investors and founders are often holders of restricted stock.

Why incorporate Form 144s into your work flow?

• Form 144s are valid for 90 days and as a result can foretell future sales
  • Even if left incomplete, the Form 144s provide a better understanding of insider sentiment
• Gain an informational advantage as, although publicly available, Form 144 data is difficult to source and not widely available
• Rare source for insiders trading at foreign companies as they about not bound by the same SEC disclosure rules
  • Second page of the filing can provide details about recent sales
• See more information regarding trusts/entities related to insiders
• More complete 10b5-1 plan information, as Form 144s are an excellent source for plan data
• Form 144s contain broker information unavailable on Form 4s, and can allow deeper insight into who handles an insider's transactions

Who files Form 144s?

Trusts and related entities that plan to sell restricted stock are also required to file these forms.  However, if the filer is an insider (or related to an insider), they will have to file a Form 4 if and when they actually sell the restricted stock.  The Washington Service has created a proprietary system that connects insiders with their trusts and other entities.  As a result, EZ-Insider users can see all related filings in a single table.

Do foreign companies file Form 144s?

Officers and directors of many foreign issuers traded on U.S. stock exchanges are not required to file a Form 4. However, they are still required to register proposed sales of restricted stock on a Form 144. Consequently, the 144 is the only source of information on insider stock sales at these companies.

How has the Form 144 market been affected by COVID-19?

Given that Form 144 filings are received via a physical paper copy with the SEC and disseminated through the SEC Reading Room, social distancing restrictions related to COVID-19 have disrupted the normal dissemination of these filings. Please see our recent Form 144 Broker Market Share Report for more information about the ongoing disruption.