Insiders Exit Shares at the Fastest Pace in Two Years

Insiders Exit Shares at the Fastest Pace in Two Years

www.bloomberg.com

The last time there were more U.S. corporations with executives reducing their holdings than adding to them was during the week ended June 19, 2007, the data show. The next month, two Bear Stearns Cos. hedge funds filed for bankruptcy protection as securities linked to subprime mortgages fell apart, helping trigger almost $1.5 trillion in losses and writedowns at the world’s biggest financial companies and the 57 percent drop in the S&P 500 from Oct. 9, 2007, to March 9, 2009.

(visit the link for the full news article)

Are we seeing a repeat of 2007? Doesn't it make you nervous when you see so many top executives selling stock like crazy? It does me. Do they know something we don't know?

Executives at 252 companies in the S&P 500 unloaded shares since March 10, with total net sales reaching $1.2 billion, according to data compiled by Princeton, New Jersey-based InsiderScore, which tracks stocks. Companies with net sellers outnumbered those with buyers by almost 9-to-1 last week, versus a ratio of about 1-to-1 in the first week of the rally.

www.bloomberg.com
(visit the link for the full news article)

reply to post by Iamonlyhuman


It's not all that unusual for execs to sell stock. That's part of how they make money. They get "options baskets," which basically means millions of dollars in free stock. The only way to cash in on that money is to sell the shares, so that's what they do.

I wouldn't look into it too much. They're just making $$$$... lots of it.

i think that your on to something only! i seen the death cross a couple of days ago, reach the breaking point of no return. the head and shoulders has come and went. within last the last 45 days we have seen the stock market go up to around 8500 with no buyers to be seen. sorry to say this but unless there is another stimulus package for the bankers, i think your going to see a tumble!

nice post, was hoping to see someone else with a pair of open eyes!

There has been a large increase of purchase in the tangibles ( gold, silver, etc.) in the past month. This is a market reaction to Obama's assault on business in general. No major company can honestly say they are not worried about the demonization or possible governmentalization of a private sector asset.

reply to post by djvexd


Do you have any examples of those "governmentalization" going on besides GM and a few bad banks?

I realize it's literally the only thing you see in the news, but GM represents a tiny tiny fraction of the total market share for capitalists in the US, and so far that's all that has been socialized. Not what I would call a "threat" to capitalism, nor is the government going to be a share holder forever.

This crap about "socialism" has got to end. We don't have socialism in America -- so say the actual freaking numbers, regardless of what the news anchors may insinuate. Pay attention.

reply to post by Kaytagg


Are you kidding me? So taking control of the major industry in this nation as well as putting a clamp down on the financial sector without limiting governmental roles in said ventures, is NOT socialism? Seriously don't try and do that usual arguement of "show me an internet post or sources ". The info is there but some such as yourself choose to ignore it. Do your own research for a change. I haven't made any claims or posts that are not fact.

Originally posted by Iamonlyhuman
Are we seeing a repeat of 2007?

Nope.

We're seeing a repeat of 1929. Except worse.

You should sell stock in your company and buy into a better company.
The real insiders hold stock for a buyout at a jump in the value
and then sell.

Some companies have their own stock that is not even on any
stock board. I heard of it. Employee ownership in some way
perhaps based on some savings.

The big thing with stock plans is that the company pays a part
of the stock you purchase through the plan.

Originally posted by djvexd
reply to post by Kaytagg

 

Are you kidding me? So taking control of the major industry in this nation as well as putting a clamp down on the financial sector without limiting governmental roles in said ventures, is NOT socialism? Seriously don't try and do that usual arguement of "show me an internet post or sources ". The info is there but some such as yourself choose to ignore it. Do your own research for a change. I haven't made any claims or posts that are not fact.

The government has always regulated industries. That's nothing new (although it might be to some).

Ever since the federal reserve was established, the entire banking industry was forced into cartelization. This controls the pace at which the "heart" of the economy beats. Nothing new there, either.

So your argument is we're socialist because we have regulations? Le sigh..

Btw, I can't go out and find something that doesn't exist. You ask me to do your homework for you, and find all these industries that we have supposedly socialized. That's a complete delusion -- but listening to Rush Limbaugh is easier than doing actual homework yourself.

I'll help you, since you seem pretty confused about the issue:

The government sponsored enterprises (GSEs) are a group of financial services corporations created by the United States Congress. Their function is to enhance the flow of credit to targeted sectors of the economy and to make those segments of the capital market more efficient and transparent. The desired effect of the GSEs is to enhance the availability and reduce the cost of credit to the targeted borrowing sectors: agriculture, home finance and education. Congress created the first GSE in 1916 with the creation of the Farm Credit System; it initiated GSEs in the home finance segment of the economy with the creation of the Federal Home Loan Banks in 1932; and it targeted education when it chartered Sallie Mae in 1972 (although Congress allowed Sallie Mae to relinquish its government sponsorship and become a fully private institution via legislation in 1995). The residential mortgage borrowing segment is by far the largest of the borrowing segments in which the GSEs operate. Together, the three mortgage finance GSEs (Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks) have several trillion dollars of on-balance sheet assets. The federal government possesses warrants which, if exercised, would allow them to take a 79.9% ownership share in the companies. The federal government has not currently exercised these warrants.

Other corporations owned by the federal government include the National Railroad Passenger Corporation (which does business as Amtrak), the Tennessee Valley Authority, the Corporation for Public Broadcasting, Fannie Mae, Freddie Mac, American International Group (AIG), General Motors, and the United States Postal Service. Many states have government owned businesses for operations as well (e.g. North Dakota Mill and Elevator or South Dakota Public Broadcasting). Generally speaking, a statute passed by a legislature specifically sets up a government owned company in order to undertake a specific public purpose with public funds or public property.

en.wikipedia.org...
en.wikipedia.org...
fas.org...

Most of these corporations have a history of socializing losses while privatizing profits, even before the Mortgage meltdown, such as Amtrak.

Originally posted by Kaytagg
reply to post by Iamonlyhuman

 

It's not all that unusual for execs to sell stock. That's part of how they make money. They get "options baskets," which basically means millions of dollars in free stock. The only way to cash in on that money is to sell the shares, so that's what they do.

I wouldn't look into it too much. They're just making $$$$... lots of it.

The issue here is that they are ALL doing it at the SAME TIME.... Yes they will do that naturally, but why the collective phenomenon? Well sure, we could chalk it up to general economic malaise, but it's definitely worth the question, and not to be dismissed out of hand...

Originally posted by Kaytagg
reply to post by djvexd

 

Do you have any examples of those "governmentalization" going on besides GM and a few bad banks?

I realize it's literally the only thing you see in the news, but GM represents a tiny tiny fraction of the total market share for capitalists in the US, and so far that's all that has been socialized. Not what I would call a "threat" to capitalism, nor is the government going to be a share holder forever.

This crap about "socialism" has got to end. We don't have socialism in America -- so say the actual freaking numbers, regardless of what the news anchors may insinuate. Pay attention.

It looks more like where going to a modern day version of Feudalism.

We are defineltu not going toward Socalism and if we are something went wrong along the way. Half of the things that go along with Socalism are no where to be seen

Originally posted by HunkaHunka

Originally posted by Kaytagg
reply to post by Iamonlyhuman

 

It's not all that unusual for execs to sell stock. That's part of how they make money. They get "options baskets," which basically means millions of dollars in free stock. The only way to cash in on that money is to sell the shares, so that's what they do.

I wouldn't look into it too much. They're just making $$$$... lots of it.

The issue here is that they are ALL doing it at the SAME TIME.... Yes they will do that naturally, but why the collective phenomenon? Well sure, we could chalk it up to general economic malaise, but it's definitely worth the question, and not to be dismissed out of hand...

Well, the S&P500 hit a low of 666.79, and a high of 945, since march 9th. That's a 41% return in a little over 3 months, which is unheard of.

That's why they're selling. Stocks are very high compared to their lows, and it's time to take profit. It could also mean they don't expect prices to go up too much higher, which would be a reasonable assertion.

Edit to add: If you're not an investor, or haven't followed the markets in the last few months, then you may not be aware of the enormous profits being made by this crash.

The first thing you learn about stocks is to buy low and sell high. It's such a simple rule, but I guess most people don't know about it. When the market goes low, and everybody is preaching gloom and doom, you buy in. When it goes up, and everybody is talking about the booming economy, it's time to sell.

I only bring this up because most people seem to be under the impression things are totally bad on wall street. That's not the case -- it's actually a gold mine.

[edit on 22-6-2009 by Kaytagg]

This really shouldn't surprise anyone.

All the sideline money is used up, the treasury is in the middle of auctioning off more treasuries then there is demand. China the largest foreign holder of our treasuries has issued statements they don't want any more. Pretty much anyone who was ready to get back in the market already has, and there is no positive news to really drive any more money back in. Then consider that the S&P 500 is trading at huge price to earnings ratios with the second quarter earnings soon to come out with more bad news. Basically anyone that was going to buy the bs hype has pretty much already bought in. It's now time for reality to set in again.

What's worse is the interest rate paid on the bonds is going to be going up, that is the only way they are going to attract more buyers with the glut they are selling. What that means is mortgage rates will go up which will drop the value of houses which will increase the amount of foreclosures and decrease the amount of new buyers, which of course leads to more banks going broke.

The economy is not getting better, the huge debt load is not gone, and unemployment as a percentage of the working has not even gone down yet, but is still maintaining terrible levels of job losses. Then you have many states on the verge of running out of money as well, and when that safety net goes away all hell could break loose.

If this does surprise you, I would have to say you haven't been paying attention.

2 ideas..

1. Maybe tax purposes (somehow.. I dont know anything about taxes, but perhaps for the rich there is a deadline or something..?)

2. Prob. the reason though is the market is up about 30 some odd% in the past few months.. you would be a fool not to take profits climbing the ladder especially if you are sitting on 100,000,000 shares of something..

Originally posted by GreenBicMan
2 ideas..

1. Maybe tax purposes (somehow.. I dont know anything about taxes, but perhaps for the rich there is a deadline or something..?)

2. Prob. the reason though is the market is up about 30 some odd% in the past few months.. you would be a fool not to take profits climbing the ladder especially if you are sitting on 100,000,000 shares of something..

I think this is very true.......now......most on ATS are stock bears but......alot of people say this is a "pure traders" market........now there is some sideline money and there is a shot......that when the market exhaust's it's down side motion that money from the "sideline's" and money managers who want to show "nice % gains" that missed out on the crazy rally train.....rush in.......at least that is the hope of most.....but it's the market ....it's a crazy economy.....so we shall see

reply to post by cpdaman


Well I would say you are 100% correct about the traders market bc the only thing big players are looking to right now are technical moves...

Today was pretty boring though.. but thats what you want to see when we are sitting on the 50 EMA in the dow

Originally posted by Kaytagg
This crap about "socialism" has got to end. There is no socialism in America -- so say the actual freaking numbers, regardless of what the news anchors may insinuate. Pay attention.

That's right. The whole thing about socialist America doesn't match what we see. Only a true capitalist country can produce fiasco similar to what has been happening. Socialist countries, like Sweden, are largely immune to the fall out of the interconnection that ties capitalist countries. I haven't heard any bitching and whining from there to be worth mentioning. Stock market is falliiiiiiiiiing . . . uneployment is risiiiiiiiiiiiiiiiiiing, things are baaaaaaaaaaaaaad . . . and so on ad infinitum. Great Depression is a nasty case of flu that a capitalist country must go periodically through. But there have been various NyQuil methods developed not make the symptoms too severe. Anyone remember Hank & Ben rushing into the pharmacy?

Insiders are selling because they know enough to realize that things are still bad and getting worse. They are beginning to get an idea of what the first half of the year looks like and don't see too many reasons to think the rest of the year will get better. We've just had a 40% bounce of a nasty plunge and anyone not taking some profits (especially if they bought at lows) deserves to lose it on the next down wave.

Who ever said that all you have to do is buy low and sell high is right, but that is not to a large degree what we are taught by the investment industry. Most people are conditioned to buy and never sell until they retire.