Today's Insider Activity for April 7, 1998
Daily Alert for Tuesday 4/7/98:
AMERICAN HOME PRODUCTS - AHP -- Last fall, when American Home Products was prompted to recall its obesity drugs Redux and Pondimin in response to safety concerns, investors apparently took it in stride. All was not lost; before long, there was talk of mergers, and the company still had Verdia, a highly-touted treatment for hypertension-a product some analysts expected to earn up to $500 million annually. Now, as the company has withdrawn its marketing application for Verdia, also in response to unresolved safety concerns, investors may have reason to wonder what, outside of consolidation mania (recently more mania than consolidation), is driving the issue's impressive price performance. Insiders may be asking the very same question, and if their behavior is an accurate indication of the answer, it may well be an ominous one. From February 4 through February 25, four insiders sold or filed an intention to sell a total of 427,691 shares at $89.74-$92.33 per share. Leading the way among the recent sellers, Chairman John Stafford filed a Form 144 intention to sell 200,000 restricted shares. Also exercising options and selling the underlying shares, SVP & Director Robert Blount exercised options for 175,800 shares, selling all the shares acquired, while VPs Rene Lewin and Paul Jones sold 24,891 and 27,000 shares, respectively. Make no mistake, insiders at American Home Products have sold in the past, and continue to maintain positions; however, for the individuals involved, these dispositions are not only considerable (representing in all cases but one, the largest open-market sales to date), but involve options not due to expire before the year 2004. Indeed, with so much of the stock's current value so apparently intertwined with rumors of consolidation and deals, that insiders are selling at all stands out not only as fact, but as well worth considering.
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