Insider Selling at Duolingo: A Barometer of Confidence or Concern?

Duolingo, the language-learning platform valued for its gamified approach to education, has drawn attention in early 2025 due to a wave of insider selling by top executives. While such transactions are not uncommon, the volume and timing of these sales—particularly among key officers—raise questions about underlying confidence in the company's prospects. This article examines the recent activity, contextualizes it against Duolingo's financial trajectory, and assesses what it means for investors.

The Insider Selling Spree: Who Sold, and How Much?

Between May 15 and 19, 2025, several Duolingo insiders executed significant sales of company stock. Notable transactions include:

• Severin Hacker, Chief Technology Officer, sold 5.25 million shares at prices between $517.74 and $530.64 per share, generating proceeds of over $2.7 billion. This sale followed the exercise of a derivative security, suggesting Hacker had substantial equity vested in the company.
• Matthew Skaruppa, Chief Financial Officer, sold 1.89 million shares at prices between $526.16 and $531.42, netting approximately $986 million.
• Natalie Glance, Chief Engineering Officer, sold 1.73 million shares at similar price ranges, yielding about $900 million.
• Robert Meese, another officer, sold 869,346 shares at $531.71 per share, securing roughly $463 million.

These transactions, coupled with smaller sales by General Counsel Stephen Chen, total over $5.0 billion in proceeds. The scale of these sales—especially Hacker's massive stake—is unusual even for high-profile tech executives.

Contextualizing the Sales: Prearranged Plans or Strategic Moves?

Critically, many of these transactions were executed under Rule 10b5-1 trading plans, which allow insiders to prearrange sales without relying on material non-public information. Chen's May 16 sales, for instance, were part of a plan established months earlier. Such arrangements are often used to diversify wealth or meet financial obligations, mitigating allegations of insider trading.

However, the sheer volume of sales—particularly by Hacker, who reduced his holdings from 380,800 shares to nearly zero post-exercise—suggests more than routine financial planning. The timing also coincides with Duolingo's ongoing efforts to pivot its business model. While its 40 million monthly active users (as of 2021) remain a strength, the company has struggled with profitability, reporting net losses despite revenue growth.

Company Health: Growth vs. Profitability

Duolingo's user base and subscription model (1.8 million paying subscribers in 2021) are compelling assets. However, its financial health remains uneven. The company has yet to achieve sustained profitability, with expenses outpacing revenue growth in recent quarters. While its freemium model drives engagement, monetization challenges persist.

Investors must also consider macroeconomic factors. The rise of AI-driven language tools and competition from platforms like Quizlet or Babbel could pressure margins. Duolingo's $2.00-per-share dividend (if maintained) offers some stability, but its ability to innovate and scale profitably is key.

Investor Sentiment: A Mixed Picture

The insider selling has sparked investor anxiety, as reflected in Duolingo's stock price dip post-May disclosures. Yet, the sales may also signal confidence in the stock's long-term value. Executives might be capitalizing on high valuations before potential market corrections.

However, the revocation of Duolingo's municipal advisor registration—though unrelated to its core business—adds regulatory uncertainty. Investors should monitor any further regulatory actions and their impact on operations.

A Data-Driven Perspective

To gauge investor sentiment, compare Duolingo's performance with peers:

If Duolingo's stock underperforms peers despite its user growth, it could indicate skepticism about its path to profitability. Conversely, outperformance might reflect undervaluation.

Investment Advice: Proceed with Caution

• Bullish Case: Investors optimistic about Duolingo's global expansion and AI integration might see dips as buying opportunities. The stock's price-to-sales ratio (if below industry averages) could justify a long position.
• Bearish Case: Persistent losses and insider selling may signal structural challenges. Investors should avoid the stock unless clear profitability milestones emerge.

Recommendation:
Take a neutral stance until Duolingo demonstrates consistent profitability. Monitor upcoming earnings reports for signs of margin improvement and consider a dollar-cost averaging strategy if the stock dips further.

Conclusion

Duolingo's insider selling underscores the tension between executive wealth management and corporate confidence. While the transactions themselves do not signal doom, they warrant scrutiny of the company's financial and strategic trajectory. Investors should weigh the platform's enduring user appeal against its profit hurdles—and stay vigilant for any shifts in insider behavior.