Quantum Computing’s Insiders Have Sold Nearly $863 Million More Than They’ve Bought. Should Investors Worry?

Insiders at ​IonQ, Inc. (NYSE:IONQ), ​Rigetti Computing, Inc. (NASDAQ:RGTI), and D-Wave Quantum Inc. (NYSE:QBTS), the three largest pure-play quantum computing companies trading on US markets, have sold approximately $863 million more of their own stock than they have purchased over the last three years combined. The figure, as per an analysis of Form 4 filings cited by The Motley Fool, comes with an important caveat: insider buying across the trio has been nearly nonexistent over that time.

A Contrast With Stock Performance

The insider-selling tendency contrasts sharply with how the stocks have performed for outside investors. IonQ, Inc. (NYSE:IONQ), Rigetti Computing, Inc. (NASDAQ:RGTI), and D-Wave Quantum Inc. (NYSE:QBTS) have all recorded exponential increases in the last two years, with some metrics showing trailing 12-month returns as much as 6,200% at their peak enthusiasm. However, insiders have remained substantial net sellers during much of the rally, while open-market purchases have been comparatively limited

The Valuation Case

The most straightforward justification for the caution is value. As of August 28, IonQ, Inc. (NYSE:IONQ), Rigetti Computing, Inc. (NASDAQ:RGTI), and D-Wave Quantum Inc. (NYSE:QBTS) had price-to-sales ratios of 68.87, 406.82, and 532.38, respectively, levels that have previously proven unsustainable for companies at the heart of key advances in technology. Almost every well-marketed innovation has had an early-stage bubble burst event, usually because investors overestimate how quickly a technology will be adopted or commercially optimized. Based on that assessment, quantum computing is still a long way from broad use or business-ready optimization, despite continued investment in the sector.