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EXCO Resources Inc. Message Board

  • sportinggoodsmaven sportinggoodsmaven Jun 25, 2012 1:32 PM Flag

    Direct vs.Indirect Purchase

    Someone with intellect please tell me the difference between a DIrect purchase of stock vs. an Indirect Purchase. Thank you.

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    • Silly it:

      Many firms offer officers and key employees opportunities to buy company stock at a discount. Money is withheld from paychecks and periodically like quarterly or semi-annually, company stock is bought for the employee at a discount, say 15% for example. This would be an indirect purchase. Bonuses to top officers also may be paid in the form of stock shares which would be indirect purchases. Whenever you see a number of insider buys taking place on the same date, disregard the buying as it was done as part of a discount stock purchase plan. At a firm I once worked for, many employees participated int the employee stock purchase program for the discount, but then sold the shares as early as the rules permitted. A direct purchase is when a company insider actually calls his/her broker and buys stock.

      So Wilbur's purchase is not as meaningful in this scenarario.

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