Insider Selling..what's the meaning?..historical contextMost investors read too much into the selling of shares by insiders. The real tell, is insider buying which has much more of a impact on the potential future direction of the SP. Selling can mean any of a number of things and not necessiarily of any relevant importance to the future direction of the SP. Such as, taking profits, raising capital, tax payemnts, personal financial obligations etc..
Certantly the recent activity with WPX is not of any material concern when a few hundred thousand shares have been traded by a few insiders relative to 58mm in insider holdings. If however, we saw a significant # of selling and by most ,if not all insiders it would prove cause for concern.
If I were venturing to guess it's a combination of tax payments and raising capital. If we are to assume that in the following months a deal will be finalized then for insiders to excersize future options (May 19) and fund those purchases along with market purchases then they would need to heed blackout period restrictions. The timing of the sales coinsides with end of April tax filing for personal & corporste taxes in Canada. All of the insiders and directors hold their shares in their personal corporations which tax filing is not until June 15th HOWEVER they MUST pay the tax by April 30th. If this is the case the timing is suitable for them to achice raising funds to pay their taxes. Given most of these guys invest in all sorts of resource companies perhaps they are selling the only shares which are profitable revative to the average excersize prices of .45. The resource industry has not been kind the last few years!
Additionally, the next exersizing expiry date for of 610,000 stock options is May 19 2014 @ $0.50
If past history is of any indication these insiders have a history of cashing in some of their annual allotment of stock compensation. Who would blame them? It's perfectly fine for them to be "paid" for their work and to do so they sell some of their stocks. Besides, their net balance is not decreasing and in fact is increasing for almost all of them. Not to mention the 21.6mm stock option based compensation available for the insiders in the future. A good portion of these options if not all of them "could" be protected and made available in a "buyout" by say RIO or otherwise.
610,000 0.50 May 19, 2014
710,000 0.50 June 1, 2015
2,500,000 0.50 December 29, 2015
225,000 0.50 February 3, 2016
3,154,000 0.50 May 20, 2016
250,000 0.50 February 15, 2017
725,000 0.50 March 30, 2017
2,195,000 0.45 November 30, 2017
11,240,000 0.45 September 12, 2018
So for the few of you who have shakey knees and are nervous abot the insider activity you will decide for yourself what the right corse of action will be. I will be happy to pick up your shares from you at a discounted price if you make them available :) GLTA