JDSU.
Ron,
Regarding your note on the other thread...
I saw the news that eight JDSU insiders set up a TRADING plan pursuant to SEC Rule 10b5-1. The purpose of this rule is to permit people in possession of material nonpublic information to BUY and SELL securities in their own company IF certain conditions are met, one of which is to set up a trading plan. The media, and in particular Dow Jones and Briefing either misinterpreted the 8K or intentionally misreported it. I tend to believe the former is true as I don't think these news wires would intentionally mislead the public.
Here is a link to Rule 10b5-1.
law.uc.edu
Here is what Reuters reported. It is correct.
JDS executives, directors file for new stock plan
TORONTO, March 12 (Reuters) - A handful of JDS Uniphase Corp. (NasdaqNM:JDSU - news) (Toronto:JDU.TO - news) executives and directors adopted a new stock buying and selling plan on Tuesday, as outlined in a filing with the Securities and Exchange Commission.
Here is what Dow Jones reported. It is wrong.
WASHINGTON -(Dow Jones)- JDS Uniphase Corp. (NasdaqNM: JDSU - news) (JDSU), a fiber optic company, said that eight of its directors and executive officers have adopted trading plans to sell company shares, according to a Form 8-K filed Tuesday with the Securities and Exchange Commission.
The plans were adopted under the Securities and Exchange Commission's Rule 10b5-1, which permits employees to adopt a written plan to sell shares.
Here is what Briefing reported. It is correct only because they quote the Dow Jones report, but they are still wrong to print incorrect information, especially when it conflicted with the Reuters report.
3:32PM JDS Uniphase loses more ground on news of insider trading plan (JDSU) 5.95 -0.69: Falls to lows of the day on Dow Jones report that eight JDSU executives and board members officers have adopted trading plans to sell company shares, according to a Form 8-K filed today with the SEC.
Let's assume the worst, that the eight JDSU insiders intend to sell shares rather than buy shares. It isn't unusual for insiders to set up sell programs for their stock. They do it as a means to diversify their holdings which are generally acquired through the exercise of stock options. Here is the current holdings as reported in the most recent insider trading report for the eight individuals listed in today's 8K.
Jozef Straus: 494 shares
Donald Scifres: 7,516,022 shares
Anthony Muller: 728,235
Scott Parker: 829 shares
Michael Phillips: 8,073 shares
Robert Enos: None listed, assume 0 shares
Casimir Skrzypczak: 6,799 shares
Peter Guglielmi: None listed, assume 0 shares
Let's think about this logically. Would a guy that holds 494 shares, 829 shares, or even as much as 6,799 and 8,073 shares file a plan to SELL shares? I doubt it. More than likely they are planning to buy shares. Why go to the trouble of setting up a plan to sell such a small number of shares?
Despite this, JDSU was down with the rest of the telecommunications equipment makers before the Dow Jones report came out this afternoon. The misinterpretation of the 8K as reported by Dow Jones and Briefing probably accounted for the dip from about 6.10 to 5.90. I think this will correct itself when people realize that the insiders may actually be planning to buy shares, or when they realize that even if they sell, it doesn't make any difference if the company performs. All this aside, I do not plan to become an investor in JDSU. I have been trading the stock the past couple of weeks and think it is a good buy based on the chart at about 6. |
