Biotech Values

[GrthzGd]

If it were up to me, exercising an option while in possession of material nonpublic information would nevertheless be a violation for the simple reason that it seems unfair.

I agree as to the bullish significance of option exercises. They mean that the exercising executive expects the issued stock to appreciate greatly, and he wants to hold it long enough to qualify for long term capital gains tax treatment on his hoped for gains.

But, unfair? The ability of an option holder to exercise whenever he pleases lies in the nature of the option itself, and the actual timing of exercise works no unfairness, as the options outstanding, exercised or no, should have already been factored into the stock valuation. If any unfairness occurs at all, it would have to be in their original issuance, not the timing of the exercise--and human nature being what it is, we need options in order to incent the executive.