Low Share PriceBased on the setup it looks like the price will go down again into the 40's from the 50's. I know management is of the opinion that a low price is not advantageous to them.
However, from a tax perspective a capital gain is only half taxable (26.5%) vs fully taxable (53%) for income. So if options are exercised when the market price is at or lower than the option price the gains above the exercise price are capital gains. If an option is exercised "in the money" then the in the money portion is income. When possible a prudent taxpayer would prefer to exercise at or just below the option price where they feel confident the price will rise within their time horizon.
So does this mean a low share price coupled with option exercises at or near market hints at the future?