Form 144

Form 144 is the notice of proposed sale that an affiliate of a company (such as an officer, director or large holder), or a holder of restricted securities, files with the SEC when relying on Rule 144 to sell shares. It is required when the planned sales in any three-month period exceed 5,000 shares or $50,000 in aggregate sale price.

How it works

Rule 144 is the safe harbor that lets holders of restricted or "control" securities sell into the public market without registration, subject to conditions: a holding period for restricted stock, volume limits for affiliates, manner-of-sale rules and adequate current public information about the issuer. Form 144 is the notice piece.

• Timing: filed concurrently with placing the sell order with a broker.
• Contents: number of shares to be sold, approximate aggregate market value, the broker, the approximate sale date, and how and when the seller acquired the shares.
• Filing: since April 2023, Form 144 must be filed electronically on EDGAR, which made it much easier to track.

Form 144 is an intention, not a confirmation. The insider may sell fewer shares or none. The actual sale shows up later on Form 4.

Why it matters for traders

Form 144 is often the earliest public hint that an insider is selling, sometimes a day or more before the Form 4. Size matters: compare the proposed sale to the insider's holdings and to average daily volume. Many Form 144s relate to Rule 10b5-1 plans or to sales after a lock-up period ends, which makes them less informative.

Example

The founder of Lumen Grid Software (ticker LMGS) files a Form 144 to sell 200,000 shares with an aggregate market value of $8,000,000, implying about $40 per share. The filing notes the shares came from stock options exercised in prior years. Two days later her Form 4 shows she sold 120,000 shares, not the full 200,000.

FAQ

Does a Form 144 mean the insider already sold?

No. It is a notice of a proposed sale. Check the subsequent Form 4 for the actual transaction.

What is the Form 144 threshold?

A Form 144 is required if sales in a three-month period exceed 5,000 shares or $50,000.