Replies to post #123964 on Zeev's Turnips Patch-No Politics (ZEEV)

[jrhana]

It reminds me of something I learned from CMGI

I remember someone remarking on CNN (I confess I used to watch it) about how the insiders were selling stock briskly as the stock was declining

http://finance.yahoo.com/q?s=CMGI&d=c&k=c1&a=v&p=s&t=5y&l=on&z=m&q=l

Then I later came on an interesting explanation (I don't remember where)

If you are a prominent insider in an insanely overvalued stock which appears to be near peaking, what do you do.

You cannot sell huge amounts or it would cause a panic.

Just margin the hell out of it

You will probably take more money out that way.

As the stock plummets the holders of the note will sell your stock for you, but it is starting to be late in the game by the time the news is out. The stock is already by definition plummeting.