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Thread: What does it mean that directors surrendered small blocks of shares?

  1. #1
    relmor2003 is offline
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    What does it mean that directors surrendered small blocks of shares?

    Anyone have a take on this? Instictively, when shares trading this low, I get a warm fuzzy feeling that its good news.

  2. #2
    AmenhotepIII is offline
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    I'd be interested in an answer to this as well. I got the below from wikipedia. High level people "disposing" of shares at .12 seem a bad sign to me. Unless they are covering a short position in their own company (kidding).

    Form 4 is a United States SEC filing that relates to insider trading. Every director, officer or owner of more than ten percent of a class of equity securities registered under Section 12 of the Securities Exchange Act of 1934 must file with the United States Securities and Exchange Commission a statement of ownership regarding such security. The initial filing is on Form 3 and changes are reported on Form 4. The Annual Statement of beneficial ownership of securities is on Form 5. The forms contain information on the reporting person's relationship to the company and on purchases and sales of such equity securities.

    D – Sale (or disposition) back to the issuer of the securities

  3. #3
    trippingthespeculatingpos is offline
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    pretty simple, in this case the guy owes some taxes, so instead of paying out of pocket he will just sell some shares = to what he owe's take the proceeds and pay his taxes with it. SIMPLE

  4. #4
    bananaz is offline
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    Are you referring to this? Scott Greenstein sold 86,346 shares @ 0.12 to pay the taxes and brokerage fees on the 1,386,961 shares he received from the company. He is holding the rest.

    The good news is that he didn't sell it all. If you wanted to try to read bad news into it, you could suppose that he would rather sell the 86K shares to pay the taxes rather than use cash he had on-hand. Or, maybe he doesn't have or want to use cash he has for this purpose. I see nothing sinister here.

    http://finance.aol.com/company/siriu...ml/sec-filings

  5. #5
    relmor2003 is offline
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    Quote Originally Posted by trippingthespeculatingpos View Post
    pretty simple, in this case the guy owes some taxes, so instead of paying out of pocket he will just sell some shares = to what he owe's take the proceeds and pay his taxes with it. SIMPLE
    Then why surrender shares? Is that the same as "selling shares". Is their a tax advantage to "surrender them" vs. selling them.

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    relmor2003 is offline
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    Does that bode bad that they would surrender shares to pay taxes? Wow, does that mean they think shares are useless?

  7. #7
    bananaz is offline
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    Yup, Tripping. A simpler explanation.

  8. #8
    trippingthespeculatingpos is offline
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    there is nothing to be worried about, you guys are way too panicky lol he's just paying his taxes without having to cut into his saving's or checking's or whatever, he would rather lose 10,000 on paper then 10,000 from his bank account im sure. I would do the same. If little things like this scare you by now you should not be in this market right now get your money out and wait for things to calm down.

  9. #9
    AmenhotepIII is offline
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    I will admit to being panicky, I'm just to stubborn to sell. So it seems like ALL the directors were trying to accomplish the same thing as Greenstein? After a quick review most of them seemed to get less then 10 grand. I would hope they think their thousands of shares are worth more then that down the road, if they have a strike price in the teens? I'm referring to the latest filings here...

    http://investor.sirius.com/sec.cfm

  10. #10
    relmor2003 is offline
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    Why would you pay taxes on receiving shares when the value has dropped? Unless they are priced as even the day the option is exersiced. Meaning the cash value of the shares is now "income", and by surrendering a set number of shares they pay the taxes on that income. Still, seems like they have no confidence in the shares becoming worth more, or why not just use cash? Cash is king right now, but with inflation coming, ANYTHING prepurchased with cash will go up in value by simply dollar index dropping. Ok, im reading way too much into this, your probably right. So, last point, did they excerise options to obtain those shares? Then it would make sense, using "money" never earned to pay taxes, just in case the stock doesnt increase in value. Still seems to be a slap at the common.

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