Peter, The press release "a little deceptive"? Maybe just a little - but if the Company had disclosed the exact details of the transaction, would the sell-off in Zitel's stock continued? IMO, yes.
The question is: Did Mr. King receive any material proceeds from the transaction after estimated taxes and transaction costs? The answer appears to be YES! Even if Mr. King claims his marginal rate is 45%, he still received over $100K in after tax compensation. Since his salary is $240K per year (1996), this compensation is material and should have been disclosed.
If Mr. King received any material compensation, the sentence in the press release that starts, "The net result of the transaction ..." is not just deceptive, but FALSE.
I'm not sure how long you have followed Zitel, but their management has established a pattern of deception. As an example, in July, Mr. King claimed to have a contract on his desk - and he went so far as to imply that the deal would be done if a lawyer had not taken a long weekend! Although Mr. King's statements in July may have been factual, the implication was completely FALSE and misleading.
A final thought. Did I overreact to the Zitel apologists? Yes. But if you have followed the posts of these individuals, you know the reason for my immediate and angry denouncements!
Regards, Bill |
