OT: Stock and Investment Talk
- Thread starter RU-05
- Start date
Getting a 10% dividend yield on XOM while you wait doesn't hurt.
Yes, agreed. And to really understand the context, for PFE or any public company, one has to spend time analyzing the proxy statement. Executive compensation is complex; I’m not making a statement on the whether executive compensation is appropriate or not. These two or three paragraph news blurbs such as the ones mentioning the PFE executive sale are often misleading in that they lack overall context. Also, it’s not unusual for executives of public companies to periodically sell stock on a predetermined schedule and/or at specific price targets. In all honesty, I find the change in FDA and initial comments on the Biogen Alzheimer’s drug, then 180 degree change by the FDA advisory, far more strange in terms of raising an eyebrow.
Don’t worry, Chris Christie thinks American Dream will make up for all those jobs.
While the market has gone ga ga for EV and solar, I still think oil has a significant place in this word for the forseeable. Given the current prices I have been considering buying a little of late.
Really like Disney as a combo of reopening stock/digital play given Disney +. The latter has kept it afloat during Covid, the former will get this thing ripping once we get past covid.
Christie had enough smarts to NEVER propose a tax on financial transactions that can happen anywhere in the country to be assessed by a single state. So the jobs wouldn't have been lost. Perhaps Bill Bradley can call and talk some sense to this delusional maniac.
To me the problem and skepticism is less about the sale of the stock at any given time but more about the announcement of the news in the vicinity of a predetermined sale. I've seen stock sales before bad news comes out too that were also preannounced.
Hypothetically, reverse it and say the vaccine wasn't looking good, I wouldn't have been surprised if that news got announced after, instead of before, a predetermined sale date and the CEO got out of a stock that would possibly tank "just in time" but the sale would've been preannounced earlier.
I have no issue with CEOs making big bucks and millions of dollars. Jamie Dimon is one of the best CEOs out there imo and a billionaire off his compensation he has received over his career and I have no issue whatsoever with it. Larry Culp could make 300MM in compensation if he can turn around GE and get it into the high teens, no issues. Bob Iger deserves every penny he got from Disney. So if one might think I'm skeptical of these kind of transactions because I may be against high CEO pay that's not the case. These kind of transactions/sales around the vicinity of major news which CEOs are privy to be they mergers, drug trial results, government actions etc....are shady to me. They should be nowhere in the vicinity of any major news announcement that a CEO would be privy to and can control the release of as well.
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Bought some WORK at $25 and some TDOC at $185. Fairly similar 90 day charts for each as they have reacted similar to the covid news over the past 3 months. Both stock prices should benefit due to the winter wave of Covid.
I like the long term stories of each, but wonder about valuations in terms of investments. So looking to get 20% out of each in a trade.
I like the long term stories of each, but wonder about valuations in terms of investments. So looking to get 20% out of each in a trade.
Good points. I believe in this case, and many others with which I have been familiar, the sale was based on a price point trigger rather than specific date. But, yea, some trades raise an eyebrow for sure. Although I’ve never seen a provision in scheduled sales to delay if there is substantive news, I suppose you could create that and avoid potential questions.
The recent exercise of Kodak options by executives was certain disconcerting and the SEC is looking closely looking
at that.
I haven't heard anyone else mention this, but that would make a lot more sense. Just looks so sketchy otherwise.
My friend's wife works for Slack so I'm constantly kidding him that the bottom is about to fall out. She rec'd a nice equity award when they went public after only being there 6 months. I hold some myself but a very small position. Lots of competition from Microsoft Teams.
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Agreed.in this case the sale was done via SEC rule 10b5-1, which allows predetermined sales based on price points and other criteria. That plan was in place for PFE since summer or before.
The Kodak CEO buying shares or Moderna executives selling shares are fishy too. There have been others in the past too, not that most ever get prosecuted or even investigated for that matter. IMO some things can be arranged to look on the up and up but really it’s an executive with intimate knowledge of news acting on it.
There are “blackout” or closed windows for “insiders”/executives around earnings releases but trading on information is tougher to always identify and control. That is under the purview is the SEC’s Division of Enforcement, who always has their plate full. There have been many insider trading instances over the decades that have violated securities laws, some we know about and some not.
I understand manpower issues and also proving insider trading can be difficult and that’s just reality. It won’t keep me from thinking that shady stuff is going on in some of these stock sales or purchases.
Well the PFE sale was in "broad daylight", announced and well publicized. Doesn't seem like he was doing anything on the sly, which would suggest this is legal.
Like I said things can be made to look on the up and up it doesn’t mean they were. Doing it in “broad daylight” as you call it doesn’t change my opinion. It’s just shows you can easily get away with it more times than not cause because of those manpower issues and proving it being difficult.
Like I said trajectory, timelines, milestones etc,...of major projects/deals etc are certainly known by the CEO and any of these “broad daylight” transactions can be placed in the vicinity of the release of such news.
but if @phs73rc77gsm83 is correct and this was a price point sale, then don't you think it's fair to say this is a non story?
I feel it must be a price point sale otherwise the move is just too brazen to believe.
There is a lot of competition, but the market is also growing so it's a bit of a tradeoff. Slack's revenues have continued to grow at a good clip including into it's last reporting. Slack also said that their customers tend to be smaller businesses which have been pinched harder by Covid so they might actually be a work from anywhere play that does better in a post covid world. But right now I'm looking at it as a trade, so I'm just looking for it to get back near it's 90 day.
Please see links
I see they note this: "The sale was part of a pre-scheduled 10b5-1 trading plan" but does that say for sure one way or the other? Ie price point or just by date? The story doesn't even note that price point is an option. Which is a significant miss of a major detail.Please see links
And Disney quickly jumps 6% on earnings results.
The important beat being Disney+ subscriptions. 73 million vs an estimated 66 million.
Also didn't lose quite as much in other areas.
Of all the digital streaming players this side of Netflix, Disney has the best hook.
The important beat being Disney+ subscriptions. 73 million vs an estimated 66 million.
Also didn't lose quite as much in other areas.
Of all the digital streaming players this side of Netflix, Disney has the best hook.
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Did you see what the Kodak CEO did to talk about brazen. Not always but often get away with it because it’s hard to prove and they don’t have the resources. IMO there’s no brazen it’s just the way of the world and reality and just have to accept it.
The quality of journalism today is poor. See the other link. By definition, the 10b5-1 plan must specify sale criteria or predetermined formula that triggers a sale in advance . Also, you can’t have Material Nonpublic Information at the time of the plan (August 19 in this case.) I’m not making a judgement on this other than to say what the rule is and my understanding of this transaction. You can research the SEC form and website if you are would like to learn more. Also, here is a good guide to 10b5-1 from Harvard Law. Ultimately, the SEC can make a determination if a transaction adheres to the rule or not. In the case of PFE, and not being involved with PFE but based on my understanding, I’d guess there was nothing illegal. Just my guess, though.
A Guide To Rule 10b5-1 Plans
Given the SEC’s increased focus on insider trading by executives and the complicated determinations needed to decide if an executive or director has ...
corpgov.law.harvard.edu
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PLTR which I bought strictly as a trade, and I was up about 60% entering today, sank 8% during market hours and another 8% in after hours on the earnings call.
Why didn't I just sell when up 60%? Cause I'm greedy. At the very least I should have trimmed back. Lessons learned.
Why didn't I just sell when up 60%? Cause I'm greedy. At the very least I should have trimmed back. Lessons learned.
While I do think we've gone down a rabbit hole on this Pfizer sale, I'm certainly learning something that relates to the OT in the discussion.
This was a link from one of the stories above.
www.investopedia.com
From this link:
So the price must be specified, but it sounds like there can be a range of dates? Also, and I didn't see it noted but I guess it is implied, what if the price target is not hit, can the sale not be executed at all?
This was a link from one of the stories above.
Rule 10b5-1 Definition, How It Works, SEC Requirements
The SEC's Rule 10b5-1 allows stock trades to be set up in advance by public companies' officers or directors to avoid accusations of insider trading.
From this link:
- The price and amount must be specified (this may include a set price) and certain dates of sales or purchases must be noted.
So the price must be specified, but it sounds like there can be a range of dates? Also, and I didn't see it noted but I guess it is implied, what if the price target is not hit, can the sale not be executed at all?
While I do think we've gone down a rabbit hole on this Pfizer sale, I'm certainly learning something that relates to the OT in the discussion.
This was a link from one of the stories above.
Rule 10b5-1 Definition, How It Works, SEC Requirements
The SEC's Rule 10b5-1 allows stock trades to be set up in advance by public companies' officers or directors to avoid accusations of insider trading.
From this link:
- The price and amount must be specified (this may include a set price) and certain dates of sales or purchases must be noted.
RU 05: The link I attached above from Harvard provides a bit more clarity, see below:
with respect to the purchase or sale, such contract, instruction or plan either must (1) expressly specify the amount, price and date; (2) include a written formula or algorithm, or computer program, to determine the amount, price and date of securities to be purchased or sold; or (3) not permit the person to exercise any subsequent influence over how, when, or whether to effect purchases or sales, provided that any other person exercising such influence must not be aware of MNPI when doing so...
Securities law doesn’t lend itself to bullets or popular journalism. That’s why I suggested earlier in this thread on another topic that source information like the SEC is preferable—or something like the law journal from a reputable school.
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Like I mentioned above this kind of PFE transaction isn't unusual and has happened in the past but I can't remember any off the top of my head outside the recent ones. So I took a look to see if I could find an article about some. This article is from 2016 and some biotech execs at different companies. Similarly just by "coincidence" they time the transaction of their stock impeccably. Weird how these "coincidences" happen over and over. It also brings up the point I made about controlling the release of info and that's just the system and you have to accept it. There are also some rebuttal points in the article.
Anyone can cite rules being followed, preannouncements, etc...and brazen broad daylight actions but I don't think you'll ever get me to believe that many of these transactions weren't done with the benefit of inside knowledge and acted upon.
Parts from the article:
A biotech company called Seres Therapeutics got some bad news late last month: Its all-important infectious disease drug failed in a clinical trial, sending its stock price down roughly 70 percent. Investors took a bath.
But in the two days before that failure became public, three top Seres executives sold a combined $2.5 million worth of the company’s stock. They made a tidy profit. They avoided nearly $2 million in paper losses.
And it was entirely legal.
That’s because the executives took advantage of an obscure federal regulation that allows insiders to buy and sell shares as long they set up the trades in advance.
In theory, it prevents company leaders from profiting off information not yet made public. But researchers digging through thousands of such trades have shown that they consistently outperform the broader market, suggesting biotech bigwigs might be gaming the system at the expense of everyday investors.
There’s a litany of examples in recent biotech history. Last month, Juno Therapeutics disclosed that three patients died in its lead trial of a novel cancer therapy, forcing it to temporarily pause development and sending its stock price plummeting more than 30 percent. Days before, CEO Hans Bishop sold $4.4 million worth of Juno stock, dodging what would have been more than $1 million in losses. Juno and Bishop declined to comment.
A similar story played out when Tetraphase’s lead antibiotic failed last fall, and when Vertex released some disappointing cystic fibrosis data in 2015. Executives at those companies and at Seres also declined to comment.
Each insider stock sale, however irksome to investors, was done legally through what’s called a 10b5-1 plan.
It’s meant to be a tidy mechanism that allows executives to exercise their rights as shareholders without playing an unfair advantage. But either there are exploitable holes in that idea, or executives are remarkably fortunate.
A 2006 study from Stanford University looked at more than 3,000 planned insider trades across all industries and found that executives’ stock sales systematically came just before bad news and right on the heels of good, helping them maximize returns and minimize losses.
And if you subtract trades that some executives schedule to be executed at the same time each year, it looks even fishier. A 2012 Harvard University study examined two decades of irregularly timed insider trades. Those transactions beat the market by as much as 25 percent each year, researchers found, suggesting insiders have a serious edge over external investors.
Those two findings are particularly pertinent in biotech, an industry known for its stock volatility, said Alan Jagolinzer, who authored the Stanford study and is now a professor of finance at the University of Colorado. A company can be completely wiped out by a bad clinical trial and boosted fivefold by a good one; the timing of a trade can swing tens of millions of dollars.
One possibility, Jagolinzer said, is by taking advantage of a wrinkle in the law: Holders of 10b5-1 plans are allowed to cancel them at any time and for any reason, and they don’t have to disclose that to the public. (They also aren’t required to disclose the existence of their plans ahead of time.)
Let’s say a biotech CEO learns that, in two days, her company is going to announce clinical results that will surely boost its stock price. She can’t legally buy up a bunch of the company’s shares right then — that would be the bad kind of insider trading — but she can cancel a scheduled 10b5-1 sale to avoid dumping stock just before its price soars.
“That is a strategy that can be technically compliant with the rule,” Jagolinzer said.
While executives don’t control the winds and rains of clinical trial results, they do have a say in when news gets disclosed. A CEO might choose to time a press release before or after a pre-planned trade, depending on how it will affect the stock price. Companies have four business days to announce important information after they learn it, according to SEC rules, creating a potential window for gamesmanship.
Some executives seem to have “a marvelous sense of timing,” said Ira Loss, who covers biotech and pharma stocks at Washington Analysis. “But this is the way the system is.”
www.statnews.com
Anyone can cite rules being followed, preannouncements, etc...and brazen broad daylight actions but I don't think you'll ever get me to believe that many of these transactions weren't done with the benefit of inside knowledge and acted upon.
Parts from the article:
A biotech company called Seres Therapeutics got some bad news late last month: Its all-important infectious disease drug failed in a clinical trial, sending its stock price down roughly 70 percent. Investors took a bath.
But in the two days before that failure became public, three top Seres executives sold a combined $2.5 million worth of the company’s stock. They made a tidy profit. They avoided nearly $2 million in paper losses.
And it was entirely legal.
That’s because the executives took advantage of an obscure federal regulation that allows insiders to buy and sell shares as long they set up the trades in advance.
In theory, it prevents company leaders from profiting off information not yet made public. But researchers digging through thousands of such trades have shown that they consistently outperform the broader market, suggesting biotech bigwigs might be gaming the system at the expense of everyday investors.
There’s a litany of examples in recent biotech history. Last month, Juno Therapeutics disclosed that three patients died in its lead trial of a novel cancer therapy, forcing it to temporarily pause development and sending its stock price plummeting more than 30 percent. Days before, CEO Hans Bishop sold $4.4 million worth of Juno stock, dodging what would have been more than $1 million in losses. Juno and Bishop declined to comment.
A similar story played out when Tetraphase’s lead antibiotic failed last fall, and when Vertex released some disappointing cystic fibrosis data in 2015. Executives at those companies and at Seres also declined to comment.
Each insider stock sale, however irksome to investors, was done legally through what’s called a 10b5-1 plan.
It’s meant to be a tidy mechanism that allows executives to exercise their rights as shareholders without playing an unfair advantage. But either there are exploitable holes in that idea, or executives are remarkably fortunate.
A 2006 study from Stanford University looked at more than 3,000 planned insider trades across all industries and found that executives’ stock sales systematically came just before bad news and right on the heels of good, helping them maximize returns and minimize losses.
And if you subtract trades that some executives schedule to be executed at the same time each year, it looks even fishier. A 2012 Harvard University study examined two decades of irregularly timed insider trades. Those transactions beat the market by as much as 25 percent each year, researchers found, suggesting insiders have a serious edge over external investors.
Those two findings are particularly pertinent in biotech, an industry known for its stock volatility, said Alan Jagolinzer, who authored the Stanford study and is now a professor of finance at the University of Colorado. A company can be completely wiped out by a bad clinical trial and boosted fivefold by a good one; the timing of a trade can swing tens of millions of dollars.
One possibility, Jagolinzer said, is by taking advantage of a wrinkle in the law: Holders of 10b5-1 plans are allowed to cancel them at any time and for any reason, and they don’t have to disclose that to the public. (They also aren’t required to disclose the existence of their plans ahead of time.)
Let’s say a biotech CEO learns that, in two days, her company is going to announce clinical results that will surely boost its stock price. She can’t legally buy up a bunch of the company’s shares right then — that would be the bad kind of insider trading — but she can cancel a scheduled 10b5-1 sale to avoid dumping stock just before its price soars.
“That is a strategy that can be technically compliant with the rule,” Jagolinzer said.
While executives don’t control the winds and rains of clinical trial results, they do have a say in when news gets disclosed. A CEO might choose to time a press release before or after a pre-planned trade, depending on how it will affect the stock price. Companies have four business days to announce important information after they learn it, according to SEC rules, creating a potential window for gamesmanship.
Some executives seem to have “a marvelous sense of timing,” said Ira Loss, who covers biotech and pharma stocks at Washington Analysis. “But this is the way the system is.”
How biotech executives profit from legal insider trades
CEOs can legally trade stock in their company as long as they don't use insider knowledge to guide them. And many get remarkably lucky.
www.statnews.com
Disney is a well positioned stock for the future and the ESPN subscriber losses have probably troughed to some degree. Disney+ has great potential for them. I mentioned back in the spring when everything was tanking DIS in the 80s might not be a bad place to pick some up and I think that's about where it bottomed. I don't know that I'd touch it here though.
So funny story. I decided to take my profits on PLTR and go so I put in an after hours to sell at $14.00.
Then as I'm watching fast money I'm seeing on the ticker that PLTR bounced back and was trading up around $14.75, and the fast money guys are all giving a positive outlook on the company, and I'm thinking dang, poorly played.
But then I go and chk my account and see I didn't put in an after hours order, but instead an order for tomorrow's market hours.
Sometimes stupid works.
Then as I'm watching fast money I'm seeing on the ticker that PLTR bounced back and was trading up around $14.75, and the fast money guys are all giving a positive outlook on the company, and I'm thinking dang, poorly played.
But then I go and chk my account and see I didn't put in an after hours order, but instead an order for tomorrow's market hours.
Sometimes stupid works.
I have a decent sized position(for my portfolio) which I'll hold. I'll buy more if it dips. Think a year from now it's significantly higher, but in the short term there are all sorts of factors, from all directions, pulling on it.
As life returns to normal, Disney stock will go up.
Obviously they’ve been hurt in their parks/hotels etc but everyone being home probably helped boost their subscriber additions to Disney+. If those subscribers are sticky and the other segments come back that would be strong positive....and of course just like Netflix you know those fees will increase over time.
Overall great week for the markets!
www.cnbc.com
S&P 500 rises more than 1% to a record close to cap off strong week as big value rotation continues
U.S. stocks rose as investors bet again on stocks that would benefit from a potentially effective vaccine and economic recovery next year.
