Some Thoughts Much water under the bridge since my last post, and TAO’s share price looking much healthier now.
For those of you who make a sport of calling into question the ethics and morality of TAO’s management and insiders...and to those for whom management’s and insiders’ buying/selling and option activity matter, here are some thoughts:
1. Throughout the share price decline of the autumn, and the precipitous drop in January after Apache’s opt out, the only reported selling of shares by insiders was that done by Elliott International Capital Advisors and Paul Elliott Singer (together, a total of 600,300 on October 31st, and 1,500,000 on November 7th). Previous to this, the last reported sale of shares by an insider was Drew Cadenhead selling 18,700 shares on July 6th, 2012. So, throughout the share price declines and tumult of the past 9 months (August 2012 - April 2013)...a period during which ~65,000,000 shares have traded (i.e. more than the total number of TAO shares issued and outstanding)...management and insiders have held tight and stayed the course.
2. Despite my belief that TAO would grant more options to management/insiders during the recent share price declines (which, by the way, I am not opposed to), none were granted. The last options granted to the management/insiders were those granted on August 9th, 2012 at an exercise price of $6.70. [Note: On March 19th, 150,000 options were granted to Randy Toone when he joined TAO...at an exercise price of $5.00, which was a $0.75 premium to TAO’s closing price the day before; he has since purchased 52,800 shares himself in the open market].
3. I expect some insider selling over the next 2 months...71,429 options exercisable at $2.27 expire on June 26, 2013 (as per page 10 of TAO’s 3Q 2013 Interim Financial Statements released on February 14th, 2013). Remember, that’s 71,429 options that were not exercised over the past almost-5 years, despite share prices that topped $11. Try to keep this in mind if some insider selling occurs over the next couple of months...it will be driven by the expiration of options, not by management/insiders abandoning ship, nor will it be due to some nefarious conspiracy to defraud shareholders. In other words, the sky won’t be falling...no need to panic.
I remain long and strong TAO...and look forward to an even more profitable future as a TAO shareholder. GLTA.