Shares of Sharper Image (NASDAQ: SHRP) are set to open down more than 60% following the company's announcement that it has filed for Chapter 11 bankruptcy protection. The press release was terse, adding that the company will "continue to conduct business as usual while it devotes renewed efforts to resolve its operational and liquidity problems and develops a reorganization plan."

Just last week the company announced that it had hired a "turnaround expert" as CEO, but apparently it was too late to salvage anything for the company's stockholders.

Back in October, shares of Sharper Image surged more than 45% in 1 day after 6 executives bought a total of $400 thousand worth of stock. The lesson for investors is clear: when insider buying is clearly done to try to send a message that the company's insiders are confident, don't buy the hope. Look for sustained, meaningful buying, not publicity stunts if you're going to invest based on what the insiders are doing.

In the bankruptcy filing, Sharper Image claimed $251.5 million in assets and $199 million in debt, with cash on hand of just $700,000.