Several days ago CEO Sullivan exercised 9,000 of his 111,000 options at $12.56/share and sold the 9,000 shares at $58.54/share. The options Mr. Sullivan exercised did not expire for over 2 1/2 years. According to last year's proxy statement, Mr. Sullivan holds just 18,000 shares of the company's stock.
In February, CFO Peterson exercised options on 3000 shares at $18.98/share and sold 1,124 shares at $50.49/share, just enough to pay for the shares he purchased at the option price. These option were set to expire in May 2012. According to last year's proxy, Mr. Peterson holds just over 50,000 shares of the company's stock.
I would speculate that the initial reaction to Sullivan's stock sales led to the initial stock price decline which was then exasperated by stop loss selling.
The company has historically been very conservative in the granting of stock options under Chairman Luke Schmieder's leadership. This apparently changed in regard to his replacement CEO Sullivan. This change has now come back to bite all shareholders, and has now resulted in the exposure of Mr. Sullivan's lack of judgement and as not having the best interests of all shareholders at heart in light of his self-serving activities. Future grants of options to Mr. Sullivan should be curtailed in light of this activity. He should have known, as Mr. Peterson did, that this type of transaction would have a severe impact on a stock that is so thinly traded as this company's. Regards, RS
Stocks that are thinly traded have these type of movements. i gave you PLPC example, a gem of a company after all the wild swings from 28 to 77 back to 41 and then back to 69 and the bottom line the company was doing fine. nobody complains when the stock is going up every day and then it turns direction and there must be some sort of problem, even apple has had wild swings. AS long as the company keeps doing well the stock price will reflect that regardless of the daily gyrations.
This type of activity by an insider, especially at the CEO level, always leaves a bad impression. Unfortunately, it is also all too common after a founder steps down after appointing a new CEO from outside the company. New guys often don't share the founders devotion to solidifying shareholder value over personal gain.
It's a good company and for the most part, well run too. Perhaps this incident was due to some exceptional situation. If there were any lessons to be learned, perhaps they have been. I am holding on for the longer ride.
Thanks for the info. yahoo didn't show those insider trades, but i guess you could look at petersens small trade of 3000 shares as bullish since he sold 10000 shares in 2011 on march 3rd. anytime a new guy takes over you never know their motives hopefully this guy has shareholders in mind because there have been many guys at the top who have ruined well run companies because they put their interest first.