RE: Morgan, et. al.Morgan, you were right about the options, just a little off on your timing. Also, stock options are usually, although not always, priced near where the stock is trading the day they are granted.
Looking at SEDI today I find options were granted for 770,000 common shares on March 19 at strike price of $1.83/share – the market close for SXC both that day and the day before. That should be it for this year as options are granted only once per year and all at the same time.
What I find interesting is the timing so early in the year, which suggests that both the senior officers and the BOD are of the opinion that the stock will go higher from here, so better get this year’s options granted while pricing is still attractive.
BTW, I don’t see this as a cause of the recent price decline, but rather the other way ‘round. There was a broader market correction in March and to the extent SXC slumped with it insiders simply took advantage of that to get their options at a more favourable price. True, there was some insider selling in the days before March 19 which may have contributed to the decline, but I’m not going to draw any conclusions here especially considering the majority of those sales were OTC in the US.
And don’t forget stock options aren’t dilutive until exercised. These guys will first have to pony up 1.83/share to get the stock in their possession with a view to selling them on the open market. Unless the share price moves to at least $5 or $6 by December, I doubt they will be exercising them this year.
Mind you, there is a backlog of options granted in previous years at lower strike prices. Some of these have already been exercised this year and there will be likely more to come. But if past patterns are any indication (and again, I found this on SEDI), any insider selling will be in dribs and drabs, not enough to materially affect the market. It’s not in their interest to do so.
Point is, as far as my DD today reveals, the strike price of options for SXC keeps rising each year (last year’s strike price was $0.77 set in July) and insiders are in no hurry to exercise them, let alone sell the shares. There were no insider sales last October when the stock was above 2.80 (go figure). Seems they’re in it for the long haul.
On another note, am I the only one here who has a sneaky feeling SXC might get on the Nasdaq this year? They operate mostly in the US. Time to get off the pink sheets.