Biotech Values

[DewDiligence]

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.

It’s a very clear signal, but one that the market often overlooks.

But, unfair?

I don’t think option awards per se are unfair, but it seems ethically dubious to allow insiders to make decisions about their personal shareholdings while they are in possession of material nonpublic information. I see such option exercises as a loophole rather than an action the authorities explicitly wanted to allow.