Insider trades show CFO Weinberger dumping his shares on the open market @ $4 share in early September, 2011....just a few days ago. I don't exactly interpret this as a vote of confidence. Opinion, comments , anyone?
OBVIOUSLY he was dumping them to the last moment he COULD, today's news is EVIDENTLY why.
Lack in faith of the CEO's plan.
Destruction of the Current Ratio. NICE.
Too many brands.
If you receive options the taxable situation occurs when the options are sold as payment must be made to receive shares.
On the other hand when shares are received for free as a performance bonus they are part of taxable income and Uncle Sam is going to want his cut.Taking care of the tax obligation on a stock grant early protects the tax payment portion of the benefit from downside risk.
Let me start by saying that I have no idea why Steve Weinberger elected to sell 15,000 shares. As one respondent has said, perhaps he needed $60,000 in cash for some reason. It could be as simple as his kids education, or wanting to finance a kitchen remodel.
One other factor to consider is the simple wisdom of diversification in financial planning. Any individual who earns his living (salary/bonus) from a company and whose investments are also exclusively, or almost exclusively, tied to that same company is by definition NOT diversified. That is the classic definition of "all your eggs in one basket."
Taking a piece of that money from time to time and investing it elsewhere is actually the prudent thing to do. Any good financial adviser would remind you of this.
Now, if he had suddenly dumped 75% or more of his shares, I might perk up my ears a little. This amount? Realistically, it likely means nothing one way or the other.
CFO Weinberger and other IF employees are paid a base salary and, upon meeting certain performance criteria, are "paid" in stock (Equity Incentive Plan). Once those shares are "vested" to the employee they often will cash them out as they are in effect part of their salary.
5/20/2011 such a stock distribution was made to Weinberger who received 33,000 shares.
Holding 131,712 shares, during the period of 9/8-9/13/2011 Weinberger apparently needed $60.000 cash and simply chose to liquidate 15,000 shares - had bills to pay just like you and me?
According to the Form 4's, Weinberger beneficially owned 131,712 shares prior to his recent sales. He sold 11,220 in these transactions, and also another 3,780 today. Interestingly, that totals to exactly 15,000 shares.
At the conclusion of his selling, he still holds 116,712 shares.
I suppose the question is, if the SNAK CFO has sold SNAK on four seperate recent days @ $4 per share; why should I add to my position in SNAK if CFO is not showing confidence in the stock? I own 172,000 shares at average cost of $2.36. I love this co's product line but I need more of a vote of confidence by mgt to add to my position.