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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: John Carragher who wrote (143432)	7/9/2006 12:29:33 AM
From: hummerbob	Respond to of 152472

Regarding Insider Sales... Selling 10% of your options is something you HAVE TO DO every year. Each year you get another batch. These new ones expire in 10 years...and if you don't exercise and sell them, you lose them. These are non-qualified options and nowdays there is no tax advantage to do any thing BUT exercise and sell. Options being excercised at the 10% per year rate is nothing more than "payroll substitution". (I'm referring to the way it was at the company I worked for...which was not a high tech co. I don't think ...or see how..it is any different at the Q.) HOWEVER.......I would be worried if someone came up with figures that showed Qualcomm stock options were being excercised much earlier than the max 10 year time frame. That would mean insiders are worried that the stock price will be lower a year from now. It's really pretty simple. The other issue is that insiders cannot buy or sell these restricted shares if they have access to information that may greatly move the stock price...acquisitions, IP deals, product announcements, etc. Corporate attorneys provide executives with time windows that they can buy or sell stock. Unless the executive is already independently wealthy from other sources, there is little reason to buy shares of your own company. It's a better strategy to sell off the options you get from the cash cow and diversify into something else. No financial planner would tell you otherwise...because each year you get stock option grants for new shares to replace the ones (the 10%) you just sold.