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Arena Pharmaceuticals, Inc. Message Board

  • skyhawksailor skyhawksailor May 21, 2013 11:54 PM Flag

    Audit's stock options time limit

    My question to everyone who is complaining about Audit is, if you were given the option to buy stock in Arena around $2.00 a share, but you had to exercise (sell) the options by today or loose the options, would you have exercised the options or loose the stock? Quit complaining about Audit. Stocks options come with two dates, the first date is the beginning date when a person can actually start exercising their options. The second date is the last day a person has the option to exercise their options. If a person does not exercise their options by the end date, they loose their options. The union I was in got us a great sounding options as part of our contract, then September 11th happen and the bottom fell out. The stock was about $50.00 when we were given these options, this was the buy price. Now the hope is the stock goes up, and when we would exercise our options we would get the difference from the buy price to the sell price. When the time period open up allowing us to exercise our options the stock was about $25.00. Our options had a shelf life of two years. Everyone was hoping the stock would get back above $50.00 so we could make some money, but it had only got back up to around $30.00 by the time the options expiration date happen. We had a choice to allow the options to expire, or exercise the options and owe the $20.00 difference in price, or allow the options to expire and not cost us anything. I really suspect Audit had to exercise the options by today or loose the stock options. I suspect he held on to the options as long as he could, hoping for the FDA to come through a lot sooner then they did.

    Sentiment: Strong Buy

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    • You guys are SPINNING the Audit sale!...HE was given options that vested and he sold them asap, he didnt have too since they dont expire for years...He is head of global sales and has an insight as to how sales will be and showed a no confidence toward sales launch.....The timing was bad and we should pay heed!!! NO SPIN LONGS and im long for years and dont like this at all...Just like i didnt like the EU withdrawal and longs were spinning it as a good thing...Its not good because now we are years away on the eu if at all and audit was hired for this job....FIRE HIM! he failed

    • That's a lot of #$%$. You can exercise the option and buy and hold the stock. He doesn't have to see the stock or lose the option. he would have to pay the cost...bfd, a buck and change for an 8 dollar stock.

      • 2 Replies to chazchem
      • Most options are set up so you exercise the options, you do not get the stock, only the profit which is the difference between the buy price to the sell price. Some, but not many stock options actually give you the choice to buy the stocks at the contract buy price. In all my days I have never met an actual person who has had this choice. I am not saying it can not happen, but it really depends on how the company writes the contract for the options. There is also an ESOP (Employee Stock Ownership Program). These programs are set up to "reward" employees with stocks. The company sets the parameters on what qualifies an employee to be rewarded with stock and how many shares. These stocks once given to the employee are theirs to sell anytime they want.

        Sentiment: Strong Buy

      • he doesn't have to "sell" the stock

    • skyhawk.....Thank you for the information. I guess I jumped the gun on misinformation. I was not aware that they would expire. If I was put in that position selling would be a no brainier. Thanks for the clarification.

    • My view on Audit. He is a man of sizable wealth, how many of you hold a portfolio of stocks, bonds, etc.? How many risk all your eggs in one basket? He, like all of us diversify our money into various baskets. Most likely he has a managed portfolio under a high client wealth advisory firm who would advise him on these options, and spread his assets over into other areas. Who knows, he may be buying Eisai stock, or options knowing what he knows. I could invest $30k more into ARNA today if I wanted, but my advisor would protest the action...I am overbalanced with ARNA in my portfolio, and it DOES NOT match the agreement of portfolio balance of all investments I hold to remain in a managed account trading free, and conforming to the managed portfolio balance of assets. Craig may very well be in the same position in the broad scheme of his portfolio, and sound advice on his ARNA assets is very sensitive to control within his entire wealth.

      We don't know his personal situation, he may be investing in a start up company of weight loss clinics for all we know.

    • - I care nothing about Audet's sales. that's his business. He doesn't tell me when to spend my paycheck.
      why to give you a thumbs down? let me count the ways.
      1. You didn't see that the form 4 specifically states that the options did not expire until 2021 and 2022. (Table 2 column 6)
      2. You typed a long post to say nothing of any consequence.
      3. You don't know the difference between lose and loose.

    • Question. Stock options areusually given to large groups of people at the same time. Why no other exercise of expiring options. Was he a recent hire in the last few years granted some options out o cycle upon hire?

      Way too much being made of this IIMO

      • 3 Replies to vanmusicblues
      • Everybody does his own planning, taxwise and finance. That is a personal issue. NOt material here. At regeneron, one controller sold options the day they vested, always, no matter what. He is an accountant and does not want to take risk (i was told). He sold at 30, 40, 60, 130. Stock close to 300!!.

      • yep, it's non event. I believe there was someone on the board who sold some options just before FDA news. People freaked out about that. It happens, all companies do it.

        Sentiment: Buy

      • Normally options are part of management tools, the theory is if a manager is good, the value of the company and the stock will go up. Stock options really do not cost the company anything, unless the stock goes down from the option price and never recovers. Our union decided this would be a great way for the craft people to make a large sum of money, why not, the stock had grown by 4+ fold over the last 5 years. Take Audit's options, he had 52,500 shares at $1.28 and 98,750 shares at $1.81. When he was given these shares Arena actually bought those shares. Once Audit exercised his options Arena sold the shares and recovered the money they bought the shares for, and gave Audit the profit. Now the more I am reading the SEC document it appears Audit did actually exercised his options on some of his shares even though they are not yet due to expire. Why he exercised his options is not told. Since he did not exercise his options on all the stock, I suspect he needed the money for some other reason. Should we be worried, no. Audit's reason to exercise some of his stock options is not a reason to start a panic. Now if all the managers at Eisai and Arena had exercised a large deal to all their option, then I would start to panic

2.15+0.02(+0.94%)Nov 27 1:00 PMEST