The ON story would be that much more compelling if ON management and directors had bought more shares in 2001 when prices reached the .40-.60 level. Nevertheless, if you include the stock options granted for that period, that explains the lack of insider buying at that time. The 2001 Form 10-K (dated 3/26/02) states (in the stock option footnote) that the company granted 1,269,750 stock options to employees at a weighted average price of 1.26. So, during that time, management was filling their pockets. It was just not that apparent.
Another fascinating fact about those insiders who bought ON stock in the 1997-1999 period at an overall average price of 2.34 (see my prior post) is that none of these insiders (who are CURRENTLY still with ON) sold any ON stock when it reached the 10.00-15.00 level in 1Q 00'. The three largest insiders were:
1. H. Delatte who had bought 210,000 shares at an avg price of 2.02;
2. E. Green who had bought 20,000 shares at an avg price of 1.97; and
3. C. Risley who had bought 45,000 shares at an avg price of 3.17;
These managers and directors left huge profits on the table. Profits, which by the way, disappeared 1 1/2 years later. (Could you imagine the conversation at THEIR dinner table!) Now, why would they do that? Are they bad investors? Are they concerned it would affect their job security, and perception of dis-loyalty to the company, if they sold? OR do they think the company is worth more than 10.00 - 15.00? Time will tell, but the LACK of insider selling when ONTC reached 10.00 - 15.00 in 1Q 00' is very intriguing to me, and helps to reinforce the stronger fundamentals of ON, and recent comments by Bob in the last cc.
By the way, Bob Doretti has a lucrative stock option package as well. According to the Form 10-K it states:
"On December 28, 2000, the Company granted to an officer fully vested options to purchase 300,000 shares of the Company's common stock at an exercise price of $0.10 per share. On December 28, 2000, the Company advanced the officer $30,000 to cover the exercise price, which was repaid in February 2001. Additionally, the officer entered into a stock restriction agreement under which the officer is subject to the certain restrictions that lapse through February 2004."
So, in a nutshell, Bob bought 300,000 shares at .10/share which are locked-up til Feb. 04'. Pretty sweet deal.
Enough said, next week we retrace to the 50 dma of 2.99, then rebound to the 4.00 - 5.00.
Thank you for the wonderful reply. It was very informative, and your dd is tremendous.
I have had a medium postition in ONTC for a while now at a cost basis of $2.20. If it gets back to the low 3's or high 2's again, I will add to my position.
It is amazing that the managers did not at least partly cash out when the stock was above $10, and I don't think they would make that mistake (if it was a mistake) again. If that is the case, there may some overhang as these people harvest if the stock runs. But nothing would please me more if we had that discussion when the stock as $12.