ServiceNow $NOW ( ▲ 1.79% ) leadership is making a visible show of confidence after a difficult stretch for the software company’s stock. CEO Bill McDermott disclosed plans to purchase $3 million worth of shares later this month, while several top executives simultaneously canceled prearranged stock-selling programs.
The move signals that insiders believe the recent selloff may be overdone. Shares initially rose on the news before giving back part of those gains.
Insiders hit pause on selling
Alongside the CEO’s purchase, McDermott, CFO Gina Mastantuono, and other executives terminated their 10b5-1 trading plans, which typically allow insiders to sell shares automatically on a preset schedule. Canceling those plans removes a steady stream of insider selling that can weigh on sentiment.
Such coordinated actions are often interpreted by investors as a bullish signal, especially when they occur after a sharp decline.
AI fears overshadow solid performance
ServiceNow’s struggles come despite strong earnings and upbeat guidance. Like many enterprise software companies, it has been caught in a broader selloff driven by concerns that generative AI could disrupt traditional software business models.
McDermott previously linked the stock weakness to acquisitions announced late last year, arguing that market worries were exaggerated. He told investors following the company’s earnings report that concerns had subsided and suggested the company’s valuation should recover.
Whether insider buying will be enough to reverse the trend remains uncertain. But the message from management is clear: they are willing to put real money behind their belief in the company’s long-term prospects.