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Non-Tech : Knight/Trimark Group, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Gary Korn who wrote (5324)	10/28/1999
From: blankmind	Read Replies (2) \| Respond to of 10027

COO zero-cost collar transactions explained and a must read, see bold: Bob Gabele's Stock of the Day Oct 27, 1999 KNIGHT/TRIMARK GROUP INC (NITE) Number of Insiders Number of Shares Bought/Sold Total Value 5 1,874,600 $34,841,652 Who could argue with the stellar year-to-date return of Knight/Trimark?s stock? Investors who got in at $80 and suffered the ensuing 62% decline, that?s who. Investors holding out hope that NITE may soon revisit its previous highs, should not overlook the actions of company insiders who have been selling stock. From July 27 through August 20, five insiders sold 1,874,600 shares at $31.00 to $47.50 per share. When the stock ran up 500% by May of this year, it would have seemed reasonable for insiders to take some profits. They didn?t. It wasn?t until the stock took a 30% tumble that insiders started to sell. Among those so inspired was President & CEO Kenneth Pasternak who sold 300,000 shares. This marked Pasternak?s second sale since the ?98 IPO, when he pared his holdings by 900,000 shares. First time sellers, CFO Robert Turner sold 65,000 shares and President of Trimark Securities, Anthony Sanfilippo sold 90,000 shares. Another first timer, COO, Trimark Securities Robert Lararowitz, sold 149,200 shares. All this, despite strong downward pressure on the stock price. Typically, when insiders sell in clusters, the activity occurs during an upward price trend. The recent actions of COO, Knight Securities Walter Raquet may provide further evidence that the upside could be limited. In August, Raquet entered into two distinct zero-cost collar transactions covering a total of two million shares. First, on August 20, Raquet sold call options covering 1M shares exercisable at $63.76, and used the proceeds to purchase puts covering the same number of shares, exercisable at $31.02 per share. The arrangement effectively shields Raquet?s one million shares from further depreciation below $31.02, while at the same time, capping his potential gains at $63.76. Then, on August 23, Raquet entered into a second collar covering an additional million shares. This time, the exercise price on the call is $63.67, and $28.65 on the puts. Some may chalk up these transactions to "smart personal finance", but if you are among those awaiting NITE?s return to its previous highs, these transactions may indicate otherwise. Knight/Trimark Group Inc. is a market maker in NASDAQ securities, other over-the-counter (OTC) equity securities, and equity securities listed on the New York Stock Exchange and the American Stock Exchange in the Third Market. Abbreviations REL (Relationship) CB = Chairman D = Director O = Officer OD = Officer/Director OX = Divisional Officer OS = Officer of Subsidiary VP = Vice President R = Retired OWN (Ownership of Shares) D = Direct Ownership I = Indirect Ownership TT (Transaction Type) P = Purchase S = Sale X = Option exercise Q = Disposition by exercise of option M = Acquisition by exchange or conversion T = Other acquisition U = Other Disposition H = Disposed of by gift thomsoninvest.net