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Curis, Inc. Message Board

  • desert_dweller93 desert_dweller93 Mar 22, 2011 7:42 PM Flag

    Form 4 filed today and not 1 post about it????

    This is such a bullish move on the part of James McNabb our Chairman of the Board and nobody commented about it? He just exercised almost 400,000 options at a cost of $556,000. These options don't expire for years. There is a grant of 62,500 that expire in June 2012 but the rest expire beginning in 2016 and later. The board Chairman just plunked down over a half million dollars and nobody noticed?

    The reason this is so bullish is because the only reason for him to exercise before they are set to expire is to start the clock ticking for long term capital gains treatment which means he thinks the price will be rising dramatically from here IMO. By exercising now, I believe he just created taxable income to the tune of over $600,000, although it is alternative minimum taxable income, it is still income for the difference between his cost and the price of the stock at the time of his conversion. The options are not qualified stock options so the tax treatment might be different but I don't think so. If anything it could be worse for him and it could create ordinary income but don't quote me on it. This type of tax issue trapped many unsuspecting dot com millionaires in the late 90's only to see their fortunes plummet when the internet bubble burst. They had huge tax liabilities and no assets to pay them, oops!

    Since the options are not set to expire for years, why plunk down over a half million dollars? These options are his and he could continue to hold them until just before they expire then exercise and sell the same day and he wouldn't have to lay out any cash but he decided to do so on Friday, why? This to me is as bullish as the results of the Roche trial results. Wall Street will wake up some day and for those of us who continue to hold or buy at these levels you will be rewarded IMO.

    I can't see any reason that he would exercise the options if he plans on selling later this year. If that was his plan, why not just wait until he is ready to sell and have the whole transaction occur the same day. My guess is it is his intention to hold these shares for at least a year. To me that should also cut down on the speculation that the company will be taken over in the near future. Surely if the Chairman of the board plans on holding stock for over a year to get long term capital gains treatment, he must not think that at the present time there is a likelihood of a takeover IMO.

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