Insider Activity: USA Technologies (USAT)

Major holder buys another 1.8 million shares.

Hudson Executive Capital LP continues to buy massive blocks of shares at USA Technologies (USAT). Following a recent buy, the company picked up another 1.8 million shares on September 26th, increasing their stake by 21 percent. The fund paid $8.2 million for the block of shares, and now owns over 10.1 million shares of the company.

With a float of only 37 million shares, Hudson now owns over 27 percent of shares outstanding.

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  • The fund may be vying to buy up 50 percent of the company to assume control, either to take the company private, or to benefit from a sale of the company to another fund.

    Although shares have been rising thanks to these massive insider buys, shares of USA Technologies are still down over 43 percent in the past year and the company is still losing money at this time.

    Action to take: The level of insider buying at this relatively small company remains intriguing, and the massive buys suggest a larger move ahead for shares either from the company’s profits improving or from a sale or action to take the company private.

    Investors should consider buying shares up to $5.00, about where shares now trade. Speculators have a limited number of options, but could buy the January 2021 $5 call options to bet on a higher move from here.