Replies to post #172724 on Biotech Values

[DewDiligence]

About 30 percent of option exercises are followed by no share sales within thirty days.

The 30% figure you cite is artificially high insofar as it includes options that are expiring imminently.

If you consider only options that have, say, six months or more until expiration, the proportion of option exercises that are held is much, much less than 30%. I would wager that it’s less than 2%.

p.s. Directors, executive officers, and 10%+ shareholders must report their purchases and sales on Form 4 within two business days.

[DewDiligence]

…by selling within a month an executive need only file one report of trades with the SEC.

This means that a separate Form 4 is not required for an option exercise if the exercised shares are to be sold within one month. Thus, when a Form 4 is filed that contains option exercises without any sales (as was the case for ENTA’s CEO and CSO), it’s reasonable to presume that the exercised shares will not be sold in less than one month.

[jbog]

Summer2762,

You have to remember that upper management has to build or obtain a warchest of shares after a ipo so that the tax timer starts.

These executives sold an equal dollar value of stock two weeks ago so that buying these shares at 73 cents per share was easy. Their only cost for the complete purchase would have their LT tax liability for the sold shares.

This transaction is as bullish as the sale was bearish. We'll see next year if these shares are routinely sold off to exercise new options.

This transaction means nothing at this point.