Interpreting Fastly's Insider Selling: Signal or Noise?

Let’s cut to the chase: insider selling is a red flag, but not always a death knell. Fastly’s (FSLY) recent insider transactions—spanning its CEO, CTO, and other officers—have sparked chatter. But when you layer in the company’s financials and the broader tech sector’s tailwinds, the picture gets murky. Is this selling a sign of trouble, or just noise in a volatile market?

The Selling: A Pre-Planned Exit or a Lack of Confidence?

Fastly’s CTO, Artur Bergman, sold 58,138 shares on September 2 at $7.41 apiece, netting $430,802 under a Rule 10b5-1 trading plan adopted in June [3]. That’s a key detail: Rule 10b5-1 plans are pre-structured, often used to avoid accusations of timing trades based on material nonpublic information. Bergman still owns over 7.9 million shares directly and indirectly, so this wasn’t a full exit.

Meanwhile, CEO Charles Compton sold 28,897 shares across three transactions in July and August, including $105,504.80 on August 18 at $6.88 [5]. His pattern—selling without buying—raises eyebrows, but again, no purchases in six months don’t necessarily scream “panic.” Scott Lovett, another officer, unloaded 136,684 shares in June and August, totaling $949,318 [2].

The question isn’t just who sold, but why. Pre-structured plans and liquidity needs can explain much. But when combined with a stock trading below its 50-day and 200-day moving averages, it’s a signal worth probing [1].

Fastly’s Fundamentals: Growth, But at What Cost?

Fastly’s Q2 2025 results were a mixed bag. Revenue hit $148.7 million, up 12% year-over-year, with security revenue surging 15% to $29.3 million [3]. The company raised full-year guidance to $594–$602 million, and free cash flow turned positive at $10.9 million—a stark turnaround from a year ago.

But here’s the rub: non-GAAP net loss per share narrowed to just $0.03, yet the gross margin dipped to 59.0%, down 0.4 percentage points [4]. Analysts are split. While the stock’s 14.42% post-earnings spike on July 30 was encouraging [3], it’s still trading at a 1.7x forward P/S multiple—a discount to peers—and short interest remains at 6.9% of float [1].

The Bigger Picture: Tech’s AI-Driven Rebound vs. Macro Headwinds

The tech sector is riding a wave of AI optimism. Global IT spending is projected to grow 9.3% in 2025, with AI infrastructure leading the charge [1]. Fastly’s security and edge-computing offerings align with this trend, but so do those of larger rivals like Akamai and Cloudflare.

Yet macroeconomic forces are a drag. Tariffs implemented in April and August 2025 have muddied supply chains, while the Fed’s dovish pivot isn’t expected to boost markets until 2027 [3]. Fastly’s insider selling coincides with a period of “cautious optimism”—growth is there, but profitability remains elusive.

Signal or Noise? A Cramer Take

Here’s the bottom line: insider selling is a warning light, not a siren. Bergman’s Rule 10b5-1 plan and Compton’s pre-structured sales suggest liquidity needs, not a lack of faith. Fastly’s financials show progress—revenue growth, positive cash flow, and a diversified customer base—but margins and profitability are still works in progress.

The broader tech sector’s AI-driven momentum is a tailwind, but Fastly’s 1.7x P/S multiple reflects skepticism. If the company can narrow its non-GAAP operating loss (projected at $9–$3 million for 2025) and prove its security and edge-computing segments can scale, the stock could surprise to the upside.

However, until Fastly’s insiders start buying—and until its gross margins stabilize—investors should treat this as a “Hold.” The market isn’t pricing in a collapse, but it’s also not rewarding confidence.

Source:

[1] Fastly Trades At A Discount As It Chases Profitability [https://finimize.com/content/fsly-asset-snapshot]
[2] [144] Fastly, Inc. SEC Filing - FSLY [https://www.stocktitan.net/sec-filings/FSLY/144-fastly-inc-sec-filing-73b6d1761df3.html]
[3] Fastly (FSLY) Q2 Revenue Jumps 12% [https://www.aol.com/finance/fastly-fsly-q2-revenue-jumps-034125611.html]
[4] Fastly (FSLY) Earnings Dates, Call Summary & Reports [https://www.tipranks.com/stocks/fsly/earnings]
[5] Gold Prices Hit New High [https://www.marketbeat.com/instant-alerts/filing-pdt-partners-llc-buys-364682-shares-of-fastly-inc-fsly-2025-09-02/]