Elite Pharmaceuticals Inc (ELTP)

[jour_trader]

Options are how most public companies align shareholder interests with management financial incentives. In Elite’s case, the CEO was paid in stock to slow cash burn. This is no longer needed. In addition, the CEO used to occasionally buy shares on the open market. This hasn’t happened for many years at even further depressed prices we have today, which says something in itself. Since the company only uses grants for mgmt/BOD vs options I would be really concerned if shares were being sold, but they aren’t, meaning shares have been accumulated. However, by not using options, shareholders continue to get ripped a new one from continued stock dilution (grants and bonus payouts) while the stock price doesn’t rise and incentives given are clearly not aligning with or benefiting shareholders, allowing stock grant receivers to accumulate more at a depressed price.
Nasrat knows this, which is why he isn’t going the options route. His end goal is a sale of the company and he wants the biggest piece of that pie, however big or small that price will be.