Insider and other sales
I've expressed my opinion that option grants have been excessive based on performance and that option grants should be out of the money, rewarding excellent performance, not just a mediocre return. That being said, once an insider owns the stock they should be able to sell as they please (except based on inside information). They owe shareholders honest, ethical service and their best effort in managing the company. They do not have a personal obligation to hold all their shares because their sales might drive down the short term price. They are damned whenever they sell. If they sell after the price has fallen, they are skewered for bailing out when the stock needs support. If they sell into a run up on no real news, they are showing a lack of faith and killing momentum. If they sell after big news comes out, then they held because they knew news was coming and took advantage. It’s their stock to hold and sell for their own benefit. They are not responsible for how others react to their sales. These people have their savings, their job, their pension concentrated in one company. This is not prudent, especially with a big unknown looming ahead that may have a dramatic affect on the company's share price. One would have to be quite a gambler not to take some of their money off the table. Ask yourself what you tell your IDCC insider son or mother or client if they asked you for your advice.
The same goes for shareholders. The stock market is the epitome of capitalism. I can’t understand those that get upset about people who trade the stock to make money. Isn’t that why we’re all investing? Some have the buy and hold strategy, some have a core to hold and some holdings to trade, some buy on margin, some short and others buy or sell naked or covered options. You pays your money and you makes your choice. Except for those who makes posts to try to move the market to better their trade, I can’t understand criticism of any other person’s trading strategy. Personally, I have my personal stock and my Roth IRA over 90% in IDCC and the rest in cash looking to buy more. I would not recommend anyone follow this strategy, but I see IDCC as a once in a lifetime opportunity so I am willing to take this risk based on the tremendous upside.
What does it mean to be loyal to a stock? I will hold IDCC as long as I feel it is a good investment. When I feel it is fully priced, I will sell. If a patent attorney I knew and respected told me IDCC had a weak case and would likely lose, I would reduce my exposure and I would share the information with the board. All anyone’s trading does is affect the very short term price. I, for one, am looking to pick up a few more shares with some recently acquired capital, so I would selfishly like to see the stock dip to the 13’s or 14’s again. Anyone who is not looking to sell now, holding options or trading on margin shouldn’t be concerned with short term price dips. Visibility into long term recurring royalties is what will propel this stock.
I owe the members of this board loyalty. JimLur created an incredible forum and has done a great job of keeping it focused. Posters (in no particular order) Bill Daglish, rmarchma, Loophool, Desert Dweller, Parq, Data Rox, Danny Detail, Billwar 98, Postyle, infiniteQ, gejim, sfx2000, hoboso, Learning2vest, brokentrade, Ed Ferrari, Dishfan, jaykayjones, alleyrat, Rich Bloem, nieves, teecee, techlover, Shallowmind, gbr, renntech and many, many others who I can’t think of at this moment have shared their expertise and insight to my benefit. I have learned much from this board and it kept me informed when the price fell to single digits. Without the quality board, I might have sold out of ignorance. Instead, I was able to average down because of the knowledge that was shared. Loyalty to board members means sharing my expertise (accounting) when questions come up and throwing my two cents in every once in a while to share another perspective. So to everyone I say thank you for all your help and generous sharing of your thoughts. I’ll be glad to help anyone with any specific tax questions (e-mail me directly). Otherwise, I’ll be reading the posts and counting the days to the trial.
Frank