Michael Doran, Sr. VP of Systems Technology who has been with Coinstar since 1996 has given his vote of confidence in the company and the ACMI acquisition.
As soon as the blackout period for insider sales was over, he decided to exercise options on nearly 16K shares and immediately sell them all at $17.71. These options did not expire for 6 more years, so there was no compelling need to exercise the options if he felt the stock would move significantly higher. Further, the average exercise price of these shares was about $11, so it's not like he was making a fortune by exercising extremely cheap options (he did that in 2002).
To make matters worse, he also elected to sell an additional 2K shares out of his direct holdings, leaving him with a grand total of about 10K shares directly owned.
Before all the longs chip in with "maybe he built a new house and needed the money" or "he was just diversifying his holdings", let's review:
* He just made over $100K by exercising options and selling the shares.
* He made another $35K by selling 2K shares he owned directly.
* In the past 3 years, Doran has made over $650K in salary and bonus.
* In late 2002, Doran sold stock worth nearly $550K.
* I assume his holdings didn't need to be diversified much since he only owns a little over 10k shares.
Looks like he didn't expect the stock to be this high any time soon. If he did, he could have waited and made tens of thousands of dollars more than he did. Even if he needed the funds right away, he could have gone to any bank and borrowed money at cheap rates by pledging his shares as collateral. If he thought the stock would be in the $20's by later this year, he could have made $50K to $100K more, just by waiting.
I assume this short covering rally surprised him as well......
Back short again....no need to welcome me back.
"To make matters worse, he also elected to sell an additional 2K shares out of his direct holdings, leaving him with a grand total of about 10K shares directly owned." - Beerman
So I started looking into Michael Doran's cstr holdings a bit more and found the following...
As of 3/31/2004 Doran beneficially owned 78,087 shares. This included 65,665 shares issuable upon the exercise of options within 60 days of 3/31/2004.
As of 12/31/2003 Doran had 56,680 options exercisable (valued at $191,945 based on 12/31/03 fair market value of $18.11) and 36,562 unexercisable.
It appears that Doran has a much more significant interest in the future performance of cstr than Beerman would have us believe.
You are always posting why this stock should fall, but it has failed to follow your doctrine. You can't even tell us why on record volume it has gone up today! Why the sole focus on this stock?
How do you know that they are non-cancellable?
You reference old CC and SEC filings, but the Merriman report is dated 5/24 and says only that mgt is making efforts to get into such contracts. You should pay more attention to the details...
On May 11, we were the first to report the discovery of Coinstar�s efforts to enter into long-term, noncancelable
contracts with its retail partners (compared to previous contracts that always contained six- or
twelve-month �out clauses� regardless of the contract�s length � providing a continuous concern to shareholders
about the risk of losing another major retail partner akin to Safeway). Considering the recent clear
indications that Safeway�s CoinMaster rollout has not been progressing well and our suspicion that other retailers
would most likely experience similar results were they to choose the same route, we believe the likelihood
of Coinstar convincing its retail partners to enter into long-term non-cancelable contracts has improved
Wow, and Mr. Doran made
$203K in Cash comp in 2003
$236K in Cash comp in 2002
$214K in cash comp in 2001
So i am sure that cashing in some shares has nothing to do with maintaining a lifestyle.
PS- you got his number of shares owned incorrect.
LOL-- was your post part of a cookie cutter bash post or did you write it from scratch?
Wow! I am amazed that anyone who works here sells there shares. I mean, you depend on the company for your major source of income (your wages) and yet you don�t want to make them your largest investment. Must be a sign to sell!
I bet you have your entire portfolio in the stock of the company you work for. I bet you never sell stock to pay for your kid's college, a new home, a new car, etc.
Me...I only invest in companies in which management owns 100% of the company- that shows real faith�oh, wait, those are private companies�LOL.
"Again, why are you surprised that more shares were purchased by employees when the stock was $15 and the company was profitable than they did when the stock was $25-$35 and the company was losing money?"
I haven't even mentioned the number of shares purchased. I'm talking straight dollar amounts. And the 26% increase in dollars contributed to the ESPP in 2003 vs. 2001 was done at very similar average share prices.
btw, I'm not surprised employees are purchasing more stock now. I think they know a good opportunity when they see it. Even if 2 insiders have sold in the past 8 months.
How good a predictor was the last big inasider sale.
(Just keepin' it honest around here (grin).
Well, skidmo, I guess the shorts are a bit agitated over that little note from Merriman today, which not only states that they believe that Kroger, Albertson and Ahold are in long-term, non-cancelable contracts, but also states that the few Texas Kroger stores previously testing Cumins-Allison machines have now switched over to Coinstar machines. If true, the last straw of hope has been yanked away from the shorts.
What makes you think Michael Doran is any better at stock trading than you. Just because he is an insider (and a nonfinancial insider at that) doesn't mean he can predict the movement of the stock. Many (dare I say most) insiders consider stock options as part of their compensation (that is why they are called "compensatory stock options") and not part of an investment program. They prefer to take their compensation on somewhat of a regular basis rather than in one large (hopefully for them), deferred chunk.
You on the other hand continue to play the fantasy trading game, devoting untold amounts of time trying to figure out how to make a buck trading. But you can't do it continuing to approach it from a fundamental perspective or making trading judgements based on other peoples' thinking (for which you can not possibly know all the factors which influence their thinking). Why would you think what Michael Doran, who presumably spends all his time in technology endeavors, does with his compensatory stock options serves as any guide to the future performance of CSTR stock?
and i guess we're to believe you had no position up until today? or lemme guess, you were short at about 17.25 and covered at 17.40 and only lost a couple of bucks...?
its funny, but it seems to me that your the only one in the world who, when he loses, only loses chump change, yet when he hits, he ALWAYS hits it BIG....
maybe it's just me, but you sound just like my brother in law who always calls (or in your case, chimes in) when he hits the daily number for $500, but doesn't call the 150 days in between when he spends about $10-20 a day playing and doesn't hit ....
when confronted, he says "ah, i only spend a couple of bucks a day on a ticket"....YEAH, RIGHT!
Yes, this insider sale, combined w/ the other one of 983 shares since early September is clearly an indictment of the whole company.
"* In the past 3 years, Doran has made over $650K in salary and bonus."
So over $200+ thousand/yr. So what? Lots of people make that much but still need access to cash for investments, home purchases, etc. from time to time. Don't know Mr. Doran's personal situation, but have heard doctors often have very low net worth, and most people would say they make plenty of $$, too.
Interesting day today...