The insider buyingIt’s great to see that insiders have been buying for the last month or so, both Alfredo Gonzales and Juan Gavida.
It has been a repeating theme on this forum that “why aren’t the insiders buying if it is so good” and of course it’s one data point that could be of some concern if the valuation is so out of touch as I presume it is. In that case insiders should be buying. On the other hand side, the insiders are part of different share based incentive programs, which have also been highly criticized on this forum that they are too generous. But with such generosity you will also have commitment to do what you can to boost share price, the question is just how much you are willing to give away to really incentivize management. And with the generous programs, where insiders already have a strong stake, the drive to buy shares in the open market will of course be much lower. If you already sit on a large stake you may rather want to diversify into other investments than put all your eggs in one basket, because even though the prospective of the company may be great going forward, there are always risks that you can’t influence and mitigate yourself such as POG, market crash, Euro-crash or some other black swans, which is why I have not been so surprised that we have not had much insider buying so far.
And this is why I really like that both Alfredo and Juan has put their earned and taxed money into play the last month. Shows strong belief that the share price will start appreciating based on improvements and progress of the business.
I know, I know, we gave them this money…, they are overpaid… etc etc, but no one forces them to buy shares in Orvana. Why should they if they would not believe in the business. In that case they would definitely invest in other opportunities to make sure they have a nice parachute ready when things go to h...
Just a thought form the side-line.