Maybe I’m in the minority here, but I don’t see a problem with people griping when the stock takes a 20% hit in one day on virtually “no news”.
Most of us cheered wildly when we won the NOK suit and when LG was signed, and we gave credit to management for accomplishing same. But (as someone who has been in business many years can attest) management is sometimes fallible, too.
I for one think that the grant of stock options to insiders is a bad practice (now evidently being abandoned as a practice by most companies, including IDCC). As Business Week and the great majority of economists now point out, the purpose of issuing stock options in the past was supposedly to “align the interests” of management and shareholders. However, when options are exercised and the stock sold immediately by insiders, just the opposite happens. This is diametrically opposed to “alignment” of executive and stockholder interests. Stock options are NOT intended as ordinary pay supplement for insiders. Incentive bonuses work just fine for that, as most companies are now coming to realize.
I think it’s a totally bad business practice for insiders to sell shares during an announced buyback. Such practice dilutes the purpose of the buyback; it tricks shareholders into believing that the company’s outstanding shares will be reduced, when in fact they won’t be, to the extent of the option exercise/sales; it raises all sorts of questions that are debilitative to stock price; the timing can never be right for exercise/sale, etc.
IDCC management has done well on several counts, and we’ve given credit when due. I think it has screwed up on insider sales, though. Bigtime. I’m long on the stock, and just bought some more, but let’s face it: Even though IDCC insider sales were not the major reason for the recent price decline, they have definitely hurt the stock to some undetermined percent and they’ve definitely caused tremendous stockholder turmoil.
I don’t think there’s any problem with discussing the subject.
