James said, "Those who control the float, control the stock price.
Well, James, I am really starting to see this as similar to one of my favorite games; chess. The events of late(the June and July rocket ride) are going to require some rethinking on the part of the insiders, in order to preserve the windfall. Straight forward selling is fine in a normal situation, but this is no normal situation. Prior to the recent 200+% increase, it is feasable that Bezos and Kleiner Perkins hoped for additional appreciation of the stock, even if they are completely clean and have no unethical or illegal reason to be confident that the stock would hold its price long enough for them to cash out. But after the increase? What I am saying is that if you have reason to believe--a high level of confidence--that the stock price will remain elevated you would have no reason to sell. Now, I ask, what are the possible reasons for having confidence that a given price will hold or elevate?
1)You really believe in the company and somehow have faith that the general investing public will also believe--in Amazon's case, in spite of the flood of confidence-disabling events that have created a sea of legitimate doubt in its long-term viability.
2)You have knowledge that the large-percentage owners of the stock won't dump the shares. How could you have this knowledge?
If you are an insider and you haven't sold due to reason one above, you are simply a gambler and should not be running a company that has been given the responsibility of safeguarding $7,000,000,000 of investors money--not that all "insiders" are management. Notice the CFO has sold large amounts, as have several other well reguarded individuals and knowledgable organizations. And if you are an insider but are not management, and you are facing the kind of news that legitimately called into question the companies profitability, then you are deluded or personally financially irresponsible if you don't sell.
Alternatively, if you are an insider and you haven't sold, then perhaps it is due to reason 2 above; of course this would be illegal and subject you to--unfortunately--probably just serious fines and loss of reputation.
I ask you who are reading this, if you could control 50% of a stocks float, could you control the price? 40%? 30%? 20%? 10%? Why is it that the SEC has seen fit to have a 5% ownership notification requirement?
Well, how many shares could you control and avoid the SEC's reporting requirement given Amazon's outstanding shares. Using the number of shares commonly listed as outstanding, which is 49,492,000, a single person or entity could own up to 2,474,600 before being required to report.
Given Amazon's "assumed" float recently of somewhere between 6 and 17 million shares, we find that a single person or entity could control somewhere between 41% and 14.6% of the assumed float. At a minimum, an individual could control 3 TIMES the SEC's minimum reporting safeguard requirement, at most, 8.2 TIMES....
Assuming a float of six million shares, it would take only 2.4 individuals to control the entire float. Assuming a float of seventeen million shares, 6.9 individuals could control the entire float--without reporting.
I have heard a saying that "there is no such thing as a secret that is known by more than one person." Translated, it's damn near impossible to keep a secret; there has to be a tremendous personal motivation to keep it. Does the motivation exist here to create "secrets?" When it is commonly accepted around all intelligent Wall Street circles--certain foolish media not included here--that your stock is worth more today than it can forseeably, within the next five to ten years, be worth, why would you not sell it? Well, if you are well educated, sensible, and, perhaps, even a Wall Street insider, you would have a great deal of trouble comforting yourself with reason #1 above. Number two would be your only reasonable defense. Therefore, I ask, what is going to happen when the "window of opportunity" is opened those several days after the earnings release?
If we see nothing, well...how would you justify that happening? Who knows who? Who knows what? Are there motives to create and keep secrets? Is it necessary to create and keep secrets given the current float--if you are a 14 to 41% non SEC-filing controller and wish to control price action--given the possibility that your stake, as a percentage of float could radically decrease any given day? Are there motives to create and keep secrets if you are a large stakeholder and do not sell?
These are questions that occur to me when I consider the coming few weeks of Amazon's and her insiders' futures.
Is selling the only hedge insiders can use to protect the massive personal windfall of investors money that has been handed over for "a job well done?",<BS>
Do the large non-filing outside owners have reason to believe the insiders won't dump massive amounts during their window of opportunity? How would they know?
Would appreciate refinements and critiques. Your thoughts?
Lee |
