P10's Insider Sell-Off: A Warning Signal for Investors?

The recent wave of insider selling at P10, Inc. (NYSE: PX) has sparked heated debate among investors. With key stakeholders offloading over $7.3 million in shares in 2025 alone—and far more when considering broader transactions—the question looms: Is this a contrarian buying opportunity, or a red flag signaling executive skepticism about the company’s near-term prospects?

The Sell-Off in Context: A Stark Contrast to Bullish Analysts

P10’s stock rose 55% year-to-date (YTD) through March 2025, fueled by analyst optimism about its niche investment strategies and stable revenue model. Yet insiders have been aggressively selling. Take 210 Capital LLC, a 10%-plus shareholder, which slashed its holdings by 8.58 million shares over the past 18 months—a staggering $100 million+ in sales—while also making a small $663,000 sale in late December 2024. Meanwhile, director David M. McCoy reduced his stake by 90,000 shares in March 2025 alone, pocketing roughly $1.1 million as his net worth from P10 dropped to $3 million from higher levels.

This divergence between insider sentiment and analyst bullishness is alarming. JPMorgan’s Overweight rating on P10, citing its “stable revenue model,” clashes with the actions of those closest to the company’s operations.

Why Are Insiders Selling?

The sell-off isn’t random. P10 operates in volatile private markets, where liquidity risks and valuation uncertainty are magnified. The company’s exposure to these markets—through its Qualitas Funds acquisition and reliance on alternative investments—means it’s highly sensitive to macroeconomic headwinds.

Consider this:
- Private Market Volatility: Rising interest rates and economic uncertainty have squeezed private equity valuations, potentially crimping P10’s earnings.
- Concentrated Ownership: 210 Capital and McCoy collectively own nearly 12% of P10’s shares. Their sales reflect a strategic reallocation of capital—possibly to safer assets—amid perceived risks.

The Contrarian Angle: Is This a Buying Opportunity?

Bulls argue that insider selling can sometimes signal a contrarian buy. After all, executives might sell to diversify wealth or meet personal financial needs, not necessarily due to company-specific concerns. However, the scale and timing of these sales raise doubts:

1. Market Timing: The bulk of 210 Capital’s sales occurred in late 2024 and early 2025, when P10’s stock was near its YTD highs. This suggests insiders capitalized on inflated valuations.
2. Net Sales Dominance: Over the past 18 months, insiders sold 9.6 million shares while buying only 124,000—a 98% net sell bias. Such one-sided activity is rarely neutral.
3. Performance Lag: GuruFocus data shows stocks bought by 210 Capital underperformed the S&P 500 by -5% in the 3 months post-purchase, while McCoy’s buys outperformed. The firm’s recent focus on selling, not buying, underscores caution.

The Bottom Line: Proceed with Caution

Investors must ask: What catalyst could offset these red flags? P10’s Q1 2025 earnings cited a 7% dividend increase and $50 million in new capital raises, but its GAAP net income fell 10% YoY, and adjusted net income dropped 4%. Without a clear turnaround in private market conditions or a major strategic win, the insider exodus signals skepticism about P10’s ability to sustain growth.

Action to Take:
- Hold or Sell: Until P10 demonstrates resilience in volatile markets or announces a transformative deal, the insider sell-off—a contrarian signal—suggests caution.
- Watch for Catalysts: A rebound in private equity valuations, a major fund launch, or a strategic partnership could justify a buy. Until then, the risks outweigh the rewards.

In a market where sentiment often drives prices, P10’s insiders are voting with their wallets—and their message is clear.

Investors should conduct their own due diligence and consult a financial advisor before making investment decisions.