At the very least, they liquidated value out of the company that's come out of some share holder's pocket. The ultimate purchase is a lump sum divided by a number of shares. If they created shares, the denominator goes up and my return goes down.
Regardless of from whom they bought the shares, they did so with an insider's advantage.
"They made several million in the process at the expense of those that didn't know they'd be getting 92� in August."
No, Kahn et al. didn't make money off of anyone. They didn't buy the shares on the open market. They bought them from the company for .01 over the market price. The price immediately soared indicating the market's belief that shareholder value had been enhanced. Their May purchase did not transfer wealth from someone else to themselves, but created new value.
The market knew before May 9 that an investment banker had been retained, a sign that a buyout was quite possible.
No DLIA shareholder on May 9 or July 31 has lost anything, nor received anything different from what the insiders are receiving.
What a dummass
they know they'd get 92� in August so they bought at 37� in May and made several million in the process at the expense of those that didn't know they'd be getting 92� in August.
Seems oblivious to me.
I'm sure Kahn didn't do anything this year for the little guy. Any benefit to the rest of us was purely incidental. But an insider case would be hard to bring without showing either: 1) shareholders on May 9 or July 31 were harmed by their self-dealing, or 2) shareholders as of those dates were treated any differently from the insiders themselves. The insiders paid .01 more than the market price when they bought, and will receive the same as everyone else when they sell out. Where's the unfair advantage?
People who bought after May 9 have no standing with regard to the first action. Shorts never have standing.
I believe as a whole that this is a good thing, but as the cc pointed out it is long term 2005. I have been long since Sept2002 and as many of the longs know alot of bs has played out since. I also believe anything is possible, and as posted earlier by rj there is only 35% approving this .928pps - NOT SET IN STONE - As many bashers pointed out Kahn is all about Kahn, and the fact that many shares where purchased in May and after todays news, definitely imho was to pump the pps. Bitter to the end....we shall see.
Kahn did it not to reap the rewards of the little buy, but to jack the price up for the sale. He knew investors would view the buy as a positive thing, he did it as a way to get more for his millions of shares.
That day in May when they bought all the those shares -- they already knew they were going to shop the place around. But the market knew that, too, when they had hired an investment banker (Peter Solomon) to investigate the company's options. Really not a secret that this might happen.
The 16(b) rule on insiders holding at least six months to keep their profits is an intriguing issue, but I'm sure their lawyers have been all over it. I don't know what the exceptions are, but they can probably claim that both their equity infusion and the buyout were necessary to avoid BK, and that all stockholders benefited by their action.
Yeah, I made some. I'd just like to get Kahn in a back alley with some of my relatives. He really is a useless weasel. Hopefully, a major stockholder will sue for insider no-nos. They HAD to have known in may what was up.