Veltex Corporation (VLXC)

[shrotker]

It is a very involved process for insiders to buy stock on the open market. Lots of SEC regs to comply with. What is of more value and benefit to the company if for insiders to provide an equity financing. They can lend the company cash in exchange for a promise of payment at a certain rate of interest or, in lieu thereof, a number of shares at a specific price. I have done this with another company I am involved in and I can say that there is usually a discount involved that makes the financing more attractive. This also serves to motivate the insider.

Surely Matin knew about the pending deal with SunShirts and he had knowledge of the Canadian operation before the announcements were made. Had he bought shares on the open market he would have violated insider trading laws because that information had not yet been made public.


Buying shares on the open market serves one primary purpose and that is to demonstarte managments confidence in the stock. I would love to see it as it would surely move the stock, but it does not benefit the company in any other way.