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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 207.67+2.2%3:59 PM EST
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To: Lizzie Tudor who wrote (105723)11/13/2003 10:50:26 PM
From: brushwudRead Replies (1) of 275872
 
I have a friend who is an insider at a tech company and he says yahoo posts "sell to covers" exactly like this Robert Herb sale. In other words yahoo reports it like you exercise the whole thing and sell the whole thing, when in fact your paperwork clearly indicated that you excercised and sold to cover.

Probably any broker can handle a "same-day sale" which requires no cash on the part of the insider. Yes, it is an exercise and a sale, and if Yahoo reports it as an entire sale, I believe them.

I don't know how to verify this, but come to think of it I haven't seen many *exercise 50K shares* coupled with *sell 9312 shares* (or some odd lot) on yahoo which I know is the most common stock option transaction.

No, selling a fraction of the shares exercised is not the most common stock option transaction. Someone who exercises an ISO can qualify for long-term gains treatment on the ordinary income tax with the exercise price as the basis, but will still be subject to Alternative Minimum Tax on the value of the exercise. And that's such a huge risk, it's almost never worth taking. Maybe someone with a lot of shares to start with can sell older shares, then exercise newer ones and hold them. NSOs don't qualify for long-term gains treatment except with a basis of fair market value on date of exercise, so I can't see why anyone would ever exercise those and not sell immediately.
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