Profit Taking at Alcoa...
Alcoa, Inc shareholders probably would have liked to have known that two key Executives sold large quantities of their personal shares in the aluminum giant in the middle of last week.Today it was revealed that Alain Belda, Chairman and CEO sold 1,873,917 shares for between $45.19 and $46.48 apiece last Wednesday July 18. He had exercised options for those shares earlier that morning for between $36.51 and $41.51.
Can we say quick profit of around $10,800,000 after capital gains taxes..?
Of course he could claim he was only following the sterling example of Alcoa CFO Charles McLane, Jr. who sold 37,132 shares for between $46.69 and $46.77 the previous day (Tuesday July 17). He had exercised options on those shares that morning for between $22.56 and $29.31 each. We didn’t find out about that until last Friday (the same day Belda filed his report with the SEC).
I wouldn’t presume to suggest that either of these fine businessmen were aware that BHP wasn’t really going to buy Alcoa which along with the news that Alcoa was no longer bidding for ALCAN had driven the cost of the shares up.
I don’t own any shares of Alcoa and haven’t for several years. If I did I might be a little troubled by all this since today on an “up” day in the market Alcoa was selling at one point for $41.34 which is less than the option price Belda paid for some of the shares he sold.
posted by jipzeecab @ 2:51 PM
1 Comments
1 Comments:
There is all too much of this going on behind the scenes in the stock market. In my 20 years in the business this was common practice. But the trades were handled delicately in the form of "not held" orders. A trader or a firm would make the sales in small blocks and NOT dump an entire order onto an unsuspecting market and thus not send the stock tumbling and create a sell-off frenzy.
At my trading post we once had a trade of 1,500,000 shares of Telex to sell at the market not held. We had a price range established by the holder, and instructions to sell in 10,000+ share lots. Over a span of five weeks we sold the entire 1.5 million shares within the specified price range.
The greedy executives usually don't have the patience to wait out long term not held orders. I suspect there was always some obvious inside information....
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