Evangelos Mytileneos Just Bought €1.6 Million of His Own Company’s Shares – Here’s What That Signal Means

When a company’s share price drops by nearly a third in less than a year, there’s a certain silence that follows. There is less ringing on the phones. Analysts become courteously ambiguous. Occasionally, an event occurs that breaks the silence, such as a founder using his own funds to purchase €1.6 million worth of his own stock in a matter of days.

Evangelos Mytilineos recently accomplished that at Metlen Energy & Metals. After purchasing 30,000 shares just two trading days prior, he acquired 25,000 shares on the Athens exchange on April 22 at €33.68 each through Kilteo Ltd., an entity linked to him under EU and UK disclosure regulations. As is always the case, the filings are dry. There is less of a signal beneath them.

It’s difficult to ignore the timing. Metlen briefly became the fastest-ever entry into the FTSE 100 when it listed in London last August at €47.16. After that, the share price fluctuated, then fell, and by late April, it had settled at about €34. It’s not good, regardless of what the market is pricing in—softer demand for metals, cautious energy spending in Europe, or the general moodiness surrounding mid-cap industrials. Nevertheless, the man whose name is still only partially attached to the business is purchasing more of it.

One of the signals that investors love to simultaneously overread and underread is insider buying. Sometimes it’s just a routine top-up, a tax move, or a restructuring of a private holding. It may indicate that the chairman has reviewed and approved the numbers for the upcoming quarter. In typical regulator-friendly fashion, Mytilineos is not disclosing which, and the announcement makes no mention of intent. It is up to the investors to interpret the tea leaves.

The size and the cluster make this one more difficult to ignore. It’s not symbolic to spend more than a million and a half euros on two purchases in one week. The technical sentiment readout that is currently displaying “strong sell” on screens at TipRanks and other locations makes this kind of move awkward. The chairman is either mistaken or the algorithms are too early. Both have previously occurred.

There is also the larger picture to take into account. Mytilineos told the BBC back in October that he thought the London Stock Exchange was “bouncing back”—a statement that has aged unevenly in light of the steady stream of departures that have occurred since, from ARM to Flutter to BHP. Despite this, he went with London, citing a workforce that was primarily trained in Britain and cultural fit. It seems almost obstinate to watch him now purchase the dip in Athens in euros on a stock that he recently relisted in pounds. A founder using money to defend his own position.

It remains to be seen if the market will ultimately concur with him. Too cyclical to be cherished, too necessary to be disregarded, European industrials are currently caught in an odd middle ground. Metlen’s exposure to metals and energy cuts both ways, and the company’s recent foray into aluminum and renewable energy hasn’t yet resulted in the re-rating that some investors had hoped for.

However, it’s worth a pause when the company’s founder continues to purchase it at prices that the market obviously doesn’t trust. It may have no significance. It could have great significance. For the time being, the truth is that no one outside of a tiny room in Athens truly knows.