Feb 20, 2014 : Stock price at $50.69
Martin J. Wygod: “… the stock has appreciated substantially recently, so I wouldn't be surprised if you saw 1 to 2 insiders selling. That would not include me.
But just because of the appreciation and the security, that no former matter takes away from the confidence that the senior management has here in relation to the continued long-term growth of this company…”
Seven months later, with the stock still at about $48, Marty Wygod and his management are selling substantial numbers of shares in a tender and on the open market.
I think he was pretty upset when he nearly lost the company about three years ago.
He is going to do everything to get absolute control and make sure nobody can take it away from him. Once they add more revenue sources, this company could become very big and might change the whole health care system.
Marty will run things till his last day. It’s going to be his monument.
All this is true; however, it doesn’t alter the fact that this whole show was a huge operation by insiders, including market makers, to drive the stock down.
It takes a bloody cheek to afterwards ask shareholders to approve another 1.7 million option grants when the stated reason for the tender was to reduce the number of shares.
The aim of all this is obvious:
Slowly but surely they are shifting ownership of the company in the direction of employees.
If all this is not manipulation, I don’t know what is.
In principle, insider trading is prohibited.
So why then can directors of a company decide to make tender offers and can participate in it?
So why then can market makers hammer down a stock because they know somebody has to sell a big number of shares?
So why do we pay taxes to pay for institutions like the SEC that are supposed to protect us from this but in fact don’t do anything about it?
Are we sheep?
Watching trading of this stock one can only shake one’s head.
There it is, going up to 47.70; only to be hammered down by market makers because one guy has to sell 70.000 shares and they all know about it.
It is sad that one has to accept the fact that there is probably more honesty on a Middle East carpet market than on NASDAQ.
Them buying back the whole lot doesn’t prevent him from disbursing this own shares.
In fact, I’ve the suspicion management sold their shares to incite others to do the same.
Perhaps this effort was more successful than they thought, so now they have this huge surplus.
If they are bold, and show they have some guts, they would take the whole lot, the shares would go through the roof, shareholders would be happy, and in the fullness of time they could increase the float by making a split.
But then, they would have to have some guts…
And what if Management decided to be bold and take all the shares offered?
After all, if they are really as optimistic about the future as they always state, they would replace those funds soon through increased earnings.
And if, for one reason or another, they all of a sudden needed additional funds, they could always issue new convertible notes.
Taking the share price before the earnings and the tender, and calculating according to the new numbers of shares, the price should now be slightly above $50.
Add to this the increase in earnings…
WebMD Health Corp. (NASDAQ:WBMD)‘s stock had its “positive” rating reissued by investment analysts at Stifel Nicolaus in a note issued to investors on Monday. They currently have a $60.00 target price on the stock. Stifel Nicolaus’ price objective would suggest a potential upside of 22.57% from the stock’s previous close.
WebMD Health Corp. provides health information services to consumers, physicians and other healthcare professionals, employers, and health plans through its public and private online portals, mobile platforms, and health-focused publications in the U.S. This stock closed up 3.6% at $49.26 in Monday's trading session.
Monday's Volume: 938,000
Three-Month Average Volume: 561,522
Volume % Change: 54%
From a technical perspective, WBMD ripped sharply higher here back above its 50-day moving average of $48.92 with above-average volume. This strong move through WBMD's 50-day on Monday is quickly pushing this stock within range of triggering a near-term breakout trade. That trade will hit if WBMD manages to take out some key near-term overhead resistance levels at $50 to $50.96 with high volume.
Traders should now look for long-biased trades in WBMD as long as it's trending above Monday's intraday low of $47.87 or above more near-term support at $46.77 and then once it sustains a move or close above those breakout levels with volume that's near or above 561,522 shares. If that breakout triggers soon, then WBMD will set up to re-test or possibly take out its next major overhead resistance levels at $52.27 to its 52-week high at $53.30. Any high-volume move above those levels will then give WBMD a chance to challenge $55 to $60.
…and of course one could say they did it as a service to us the people: The more shares the company can buy back, the more the remaining shareholders should benefit.
And management can always give themselves some new options…
They exercised stock options to sell shares in the open market, such depressing the price and inciting shaky shareholders to give up shares in the tender.
Manipulation, yes, but legal.
Hi tracey, I always appreciate your opinion. I am more optimistic than you, because I’m expecting an earnings explosion. Why else would they have the tender instead of continuing with the re-purchase? According to Schlanger, “the tender provides and opportunity to buy a more significant amount of shares at one point of time”. So they are in a hurry, because once they have signed up the new orders, the stock is not going to be that cheap.