So, several of you have inquired as to why the stock price has been slowly, painfully dropping over the past days, weeks ... well, one theory you could suscribe to is the annual award of bonus shares through the Equity Compensation Plan ... last year, TA's CEO was awarded 200,000 shares ... consider this:
1) Last years Form 4's were posted on 1 Dec (Effective date 29 Nov 2011)
2) Look at Yahoo's historical prices to see the gradual drop in shareprice leading to the effective date (29 Nov 2011) ... at that price the restricted shares are awarded at that price and vested over ten years.
3) After the Equity Compensation Plan bonus shares were awarded the shareprice began an immediate recovery ... so, they could sell a portion to pay taxes I'm sure
4) This stock is very highly undervalued ... they are trading well below tangible book value
5) After the bonus shares are awarded this stock is setup for a very solid 2013 ... most likely a double
6) If history repeats itself, the bonus shares will be awarded today (or in coming days) ... you will not know the bottom is in until you see the Form 4's posted ... which will likely be days later
7) If any of this sounds logical to you, start buying today ... and expect them to run the price down to set their bonus share price ... wait for it, wait for it ... for the record, I've already bought some
Or you may think I'm just crazy ... good luck to all
It is important for all to understand the following:
The amount that must be declared is determined by subtracting the original purchase or exercise price of the stock (which may be zero) from the fair market value of the stock as of the date that the stock becomes fully vested. The difference must be reported by the shareholder as ordinary income. However, if the shareholder does not sell the stock at vesting and sells it at a later time, any difference between the sale price and the fair market value on the date of vesting is reported as a capital gain or loss.
Section 83(b) Election
Shareholders of restricted stock are allowed to report the fair market value of their shares as ordinary income on the date that they are granted, instead of when they become vested, if they so desire. This election can greatly reduce the amount of taxes that are paid upon the plan, because the stock price at the time of grant is often much lower than at the time of vesting. Therefore, capital gains treatment begins at the time of grant and not at vesting. This type of election can be especially useful when longer periods of time exist between when shares are granted and when they vest.
Form 4's are now posted ... CEO got another 200,000 ... the rules say a Form 4 must be posted within two days of "any" award ... they did not drive price low enough for all 200,000 of CEO's bonus imho ... I would watch over coming weeks for spikes lower ... earliest transaction date was 4 Dec (posted Form 4's 5 Dec) ... if we look at last years pattern, it initially popped after Form 4's posted but trended lower until end of Dec ... he has to be awarded his "annual" bonus shares this year ... last year the dramatic move higher started in January (after all bonus shares were granted) ... I'll continue to keep a disgustingly low buy order in just to see how motivated the CEO is ... I still expect a share move higher starting in early 2013
For God's sake, try to keep up man! Did you even read any of my posts since the Form 4's posted ... let me really break this down for you ... the CEO (and others) appears to have the OPTION to take their ANNUAL bonus shares over a time period ... the ANNUAL bonus shares MUST be awarded in 2012 ... that means they have until the END OF THE MONTH to set their restricted stock price ... so, as I said earlier BUY ON THE DIPS UNTIL THE END OF THE MONTH ... they will DRIVE THE SHARE PRICE SHARPLY HIGHER beginning in early JANUARY 2013 ... they will do this because they have to PAY TAXES on their ANNUAL bonus shares at ORDINARY INCOME so that they can pay only the CAPITAL GAINS RATE as their shares vest over the next ten years ...
I apologize for even pointing out the Equity Compensation Plan ... have a nice day!