Anyone have a take on this? Instictively, when shares trading this low, I get a warm fuzzy feeling that its good news.
Anyone have a take on this? Instictively, when shares trading this low, I get a warm fuzzy feeling that its good news.
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
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
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
Then why surrender shares? Is that the same as "selling shares". Is their a tax advantage to "surrender them" vs. selling them.Quote:
Originally Posted by trippingthespeculatingpos
Does that bode bad that they would surrender shares to pay taxes? Wow, does that mean they think shares are useless?
Yup, Tripping. A simpler explanation.
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.
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
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.
If he received 1.5 million shares at 0.12/share, he received basically $180,000.00 in compensation and must pay taxes on that compensation now. He'll pay taxes on appreciation (or take a tax loss) when he sells them.
yes, but the million dollar question is this./..Quote:
Originally Posted by bananaz
The SEC filing said it MAY have been for taxes occuring on the excercise of options. Does this then mean all these directors choosing now to excersice options means they think the stock has bottomed? And where is the SEC filing for the activation of the options? Would this come later? Or were these options already executed, or shares already given?
Still confused. What I dont get is, how can you pay taxes on excercising a stock option you havent excercised yet? And if they did, where is this filing?
Sorry but I can't answer that question because I don't know why they were given the options in the first place. This may have been the earliest that any of them could have exercised them or they or Sirius may have needed to acheive certain goals to be able to exercise them. If they received the stock then they must have exercised options.
Does anyone out there know?
The additional shares issued will dilute the existing pool but not by much. The stock went up today in a down day so I don't think that the dilution was an issue.
The positive thing I got from reading each of the reports is the number of common shares each one of them still owns: from approx. 500,000 to well over a million.
It is in their own best interest to do what is best for the shareholders, namely themselves. This makes me believe that Mel took the best deal.
Standard Operating Procedure.
This has been an annual event that has been debated for years -- not just with Sirius.
What happens is that managment and the BOD (and other employees) are granted stock grants that vest over a period of time (usually 1 to 3 years). When they vest, it is considered a "taxable event" and the value of the shares at the time of vesting is considered "earned income". So many companies offer a cashless exercise type of option where they will withhold a number of the vesting shares to cover the State and Federal taxes and brokerage fees incurred by the vesting shares.
Critics will say that if the officer truly believed in the company -- then they would just pay the taxes out of pocket and not sell the shares; others say, get in touch with reality... why pay with cash when you can pay by selling vested shares?
Regardless, it's really a non-event -- always has been.
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lol homer it doesnt matter relmor is hell bent on being worried about this :o
Here's an example of the math... let's say Officer A received a stock grant for 1 million shares on February 20, 2006, back when the stock price was $3.75 -- and the shares fully vest in 3 years.
Jump ahead 3 years to February 20, 2009 -- the 1 million shares now vest fully... but the stock price is at $0.13. Well the earlier grant price of $3.75 is irrelevant. What is relevant is the closing price of the stock on the day the shares vested, which was $0.13. That means the 1 million shares vested at $0.13 and are valued at $130,000. This $130,000 is EARNED INCOME to Officer A. They now owe state and federal taxes on this $130,000... so they typically withhold (sell) enough of the vested shares to cover the taxes and the brokerage fees.
The remaining shares are now fully owned by Officer A, with a cost basis of $0.13. If he holds for the 1 year period, then the holdings will become LT holdings and taxed at 15%. If he sells before then, then it is ST and taxed at his earned income rate. When the employee does sell, taxes will be owed on the amounts from $0.13 to whatever the price the shares were sold at.
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Trippin -- Relmore is confusing Stock Options and Restricted Stock Grants -- which there is a world of difference. Most companies are getting away from stock options these days, in favor of Stock Grants. Mostly because all stock grants must be expensed now, thanks to changes in financing rules.
Stock options don't become a taxable event on their own -- they have to be exercised. Restricted stock grants however, are a taxable event when the shares vest. Regardless of what the employee does. The taxes are owed, based on the price of the stock on the day the shares vested. That can either be paid in cash out of pocket or by withholding shares. Most times you'll see them do a share withholding.
My company has given me both, Options and Restricted Shares -- actually, now that I think about it -- I have a batch of restricted shares vesting next month. That will be a taxable event for me, as it will be earned income. Should I pay out of pocket or via a share withholding???
ANSWER: I'm not putting any more money into this market at the current time.
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why the hell would u pay out of pocket, u like spending money pointlessly? :o
btw thx for breaking it down, although i dont know all the in's and out's it was quite obvious overall what was going on.