Insider selling on the way down

Sell! Sell! That is the signal being given by the executives of AMR, the parent of American Airlines. Despite the stock being down 71% from its 52 week high, executives including three VPs, the Chairman of the Board and the CFO sold more than $3.3 million worth of stock.

I generally don’t pay too much attention to insider selling, because insiders sell for various reasons, but insider selling on a stock that has plunged is an ominous sign and most often means that worse news is coming.

To buy AMR right now is potentially buying a bankrupt company. Why on earth would I be buying from the top executives of AMR in such a tricky financial state.