NRDY

Nerdy ($NRDY) CEO Buys $40M in Shares Over 18 Months While Other Execs Sell... Mixed Signals

12/17/2025 14:19

Charles Cohn, CEO of online education platform Nerdy ($NRDY), has embarked on an unprecedented insider buying spree, purchasing $40 million worth of company shares over the past 18 months since the stock's dramatic collapse. This represents an extraordinarily rare scale of insider buying for a small-cap company with a $230 million market capitalization, serving as both a powerful signal of management confidence and a potential double-edged sword for investors. Nerdy operates as an online tutoring and educational services platform serving K-12 and college students through its flagship Varsity Tutors brand, providing personalized learning solutions. While the company experienced growth during the pandemic-driven online education boom, it has recently faced challenges from intensifying competition and market normalization. The most remarkable buying activity began in August 2024 when shares plummeted from around $1.60 to the $0.80s. Cohn stepped in aggressively, purchasing 13 million shares worth $13.2 million over just two days on August 16 and 19. This represented over 10% of the company's market capitalization at the time. The buying didn't stop there. From November through December 2024, he made 20 additional purchases totaling $14 million, and has continued his buying campaign well into 2025. Particularly noteworthy is the timing and price levels of these purchases. Cohn continued buying even when shares fell to $0.84, and didn't stop even at highs near $1.90. This suggests not opportunistic bottom-fishing, but rather long-term conviction independent of current price levels. In stark contrast, other executives have been selling. CFO Jason Pello and CLO Christopher Swenson have consistently sold shares throughout the same period, with Pello disposing of $600,000 worth and Swenson $450,000 worth from June 2024 through December 2025. While these sales appear to follow 10b5-1 trading plans, they create a striking contrast with the CEO's massive accumulation. This insider trading pattern sends mixed signals to investors. Optimistically, it suggests the CEO has strong conviction about the company's long-term prospects and views current share prices as significantly undervalued. Cohn has a proven track record, having founded and successfully grown Varsity Tutors before taking it public via SPAC in 2021. However, concerning aspects remain. Recent financial performance shows Q2 2025 revenue declined 11% year-over-year to $45.26 million with a 7-cent per share loss. Q3 revenue fell 1% to $37 million with adjusted EBITDA losses of $10.2 million. Continued CEO buying amid such operational struggles raises questions about cash management and capital allocation priorities. Market experts are divided between viewing this as the 'ultimate expression of management conviction' versus 'dangerous gambling.' In the optimistic scenario, the online education market could rebound with AI technology advancement, positioning Nerdy as a market leader beneficiary. The company has indeed launched its AI-native Learning Platform 2.0, pursuing technological differentiation. Conversely, the concerning scenario involves continued online education market growth deceleration and intensifying competition, potentially preventing the company from achieving profitability recovery. In this case, the CEO's massive buying could result in shareholder value destruction. Key indicators for investors to monitor include quarterly performance improvement trends and changes in the CEO's buying patterns. If operational improvement signals emerge, current massive insider buying could prove to be bottom-fishing genius. However, if poor performance continues while CEO buying stops, that would represent a true red flag. Currently trading around $1.30, Nerdy shares are near the CEO's average purchase price range of $1.20-$1.40, suggesting he views current levels as fair or undervalued. However, investors should avoid relying solely on one person's conviction, instead carefully monitoring actual business performance and market environment changes.