RE:Insider Transactions Hi Lattice, do you have evidence that Thompson actually hedged these shares, either himself or through the numbered company, or is thid just conjrcture? Also, would he not have to disclose any hedging as an insider transaction? Or would the act of transferring the shares to a trust or the nature of the transactions mean he could do this without reporting this? Marcel
Lattice wrote: There has been numerous comments made on this board on the fact that Thompson has a lot to lose with his personal shares totalling 2.1 million. Everyone that has been following my posts for the last 3 months knows that I have had a watchful eye on the unusually high amounts of comp stock that the company has awarded insiders and Directors in 2015, and more recently in the form of derivatives in 2016.
So what can insiders really do with all this stock if they are not selling?
Investors can find a clue in the proxy filed May 2015 on SEDAR:
"The Corporation has not adopted a formal policy preventing directors and executive officers of the Coporation from purchasing financial instruments, such as, prepaid variable forward contracts, equity sqaps, collars, or units of exchange funds, that are designed to hedge or offset a decrease in market value of equity securities granted or compensation or held, directly or indirectly, by the director or executive officer of the Corporation."
In January 2016, the awards to directors took the form of derivatives and the gifting was over the moon starting January 1, 2016, right after director Kupinsky's dump of Decembe 31, 2015 in the open market. Could this be the point that the insiders thought the stock had reached its peak? ($58ish). Then the warrants started being awarded, a gigantic chunk every alternate monthof 2016.
Specifically, lets look at the awards for Mark Laurence Thompson so far for 2016:
01-07-2016 Grant of Rights 100,000
01-29-2016 Grant of Rights 270
03-24-2016 Grant of Rights 117,538
04-29-2016 Grant of Rights 676
Furthermore at the beginning of February, Thompson transferred all of his 2.1 million shares to a limited numbered company 2496544 Ontario Ltd. and after the dump that Kupinsky dump of personal shares in December he now owns 624,000 shares, but interestingly all of it is held indirectly in various trusts.
So, investors on this board may be saying to me what's the big deal? And why should we care if Thompson and Kupinsky are transferring their personal stock into other entities all around a time when the stock looks to have in hindsight peaked?
I asked everyone here whether they could offer a reason for this, and it was suggested that it was for tax reasons which I reject as any capital gains would have qualified for a 50% preferential tax treatment as anyone who has churned out their own personal taxes knows. So the idea of him doing this for tax reasons is rejected (and I have consulted with Collins Barrows on this matter as well so nowneed for the pseudo-accountants on this board to cut and paste exerpts from Taxes For Dummies to me.) When reading throught the management circular dated March 24, 2016 the answer became clear to me and even clearer in a Concordia PR dated May 13, 2016.
If you recall, this was the press release that left the people on this board a little confused as to why Concordia would have the need to send out a PR that prevents Directors from hedging their personal shares. As investors are painfully aware, communications from the company are (lets be honest...) few and far between so when one does come out we should all sit up and pay attention to it. This PR saw the stock dive that day, but as usual the drop in sp was just blamed on the shorts.
This should be concerning to investors and additionally the oh-so-benevolent stock pumpers that have been maintaining that MT has too much to lose because he has 2.1 million shares in the company. It is quite laughable, really, that the CEO of a company would be hedging his own shares
in a limited numbered company at the very time he is reiterating in a con call that "everything is performing exactly as we anticipated...." And then get caught, do a quick change in corporate conduct and then ink it out in a press release. Sheesh. If you think there is nothing wrong with this, I think you should load up more shares (and do it on margin while you are at it).
More on insider transactions later. Just more junkyard dirt, so you may want to press the ignore button now on my profile if you haven't already done so.