There is a big difference between direct insider selling and option related selling. With the exception of Jorgenson, all sales were option related. Because the options were classified as employee stock options, rather than non-qualified stock options, the Alternative Minimum Tax applied and Hemelt and Kehoe faced a large tax liability due to the exercise of their options (100,000 and 18,000 respectively). They sold out of necessity and still hold 101,400 shares and 24,000 shares respectively. Yuan exercised 10,000 options and sold 10,000 shares. He may have done so to pay for the exercise of the options and his taxes. Yuan is only a Director and sold a small amount. He isn't an employee of the company and isn't privy to forthcoming material events. Jorgenson is retired and has left the Board. He is only considered an insider because he acquired his stock while he was the Chairman. GumTech's officers are not highly paid, partly because a portion of their compensation is in the form of stock options. In addition, officers can't sell stock 30 days before or 30 days after news releases. The only window of opportunity for them to sell in time to pay their taxes was in February. The bottom line is that less than 100,000 shares were sold, and option related sales are common and not reflective of future fundamentals. The stock was sold at a higher price than the current market price anyway. Shorting, selling, or holding a short on the basis of this non-material, minuscule selling would be a grave mistake, IMO.
Good luck,
Dan |
