InterDigital Inc (IDCC)

[The Count]

Insider sales

Good people, please refrain from this moaning and gnashing of teeth every time an insider sells his stock. Unless it turns out that the sale was based on inside info in violation of the letter or spirit of SEC rules, there is nothing improper about it.

The insiders have a fiduciary duty to do their job to the best of their ability for the company. They do not have a duty to buy or not sell shares to avoid hurting the share price. Once they get shares, they are entitled to sell them for whatever reason they choose, just like any other stock holder. One very good reason is to diversify. I've advised many a client that had their job, pension and portfolio all in one company to sell. It's the prudent thing to do.

Does this hurt the stock price? Probably a little bit, as many people see an insider sale and assume no good news on the horizon. However the affect is very short term, so unless you were going to sell in the next week or so, it won't affect your investment. And if you are planning on selling soon, why should you be able to and not Uncle Billy? It would be ridiculous to pay people with stock that they are not allowed to sell. If you see this as actual bad news, sell and buy back when your confidence returns. If you don’t then don’t worry about it.