The Appen Ltd (ASX: APX) share price dropped 7% today as investors worried about a share sale by management.

Appen provides data for machine learning and artificial intelligence. Basically, it provides and improves data for the development of artificial intelligence and machine learning products. With more than 20 years of experience in over 130 countries, Appen has firmly established itself as a global leader in this space.

Appen’s Share Price Drop

Investors are worried about what the sale of shares by the CEO/Managing Director means for the business.

Mark Brayan, who holds both the CEO and Managing Director positions at Appen has sold 100,000 Appen shares for a price of $26.576 each, meaning he receive more than $2.6 million for his shares.

Why Did The Appen CEO Sell Shares?

Appen said the share sale was satisfy tax obligations and to diversify his personal investments.

I can certainly understand that each reason given is a potentially valid reason for the sale. Sometimes the taxes on employment-given shares can be quite high, so the CEO may not have the cash to cover it.

Having your employment and most of your wealth tied up in the same company might also not be a great idea on paper.

But, I think it’s a perfectly legitimate concern of investors to be worried that the CEO chose now to sell shares. Is bad news on the way? Does the CEO think the Appen share price is overvalued?

Does The CEO Have Any Shares Left?

Mr Brayan still has 404,414 shares in Appen directly and indirectly as well as 442,583 performance rights available subject to meeting the conditions.

So, it’s not like he’s completely sold out of all his shares. But I do think it could be a sign that the CEO believes it’s worth taking some profit off the table at the current price.

I wouldn’t want to be buying shares at the current price if the CEO is selling shares. I’d much rather think about the two ASX growth shares in the free report below for my portfolio instead.

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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).

At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.