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QuestionsCategory: Management QuadrantIs Such (GHL Sys Bhd) Insider Trade Reasonable?
Khuen asked 8 years ago

Hope you may share with us your opinion in such Insider Trade, is this reasonable and favorable to Investors?
Within July 2014:
Event 1: GHL announced an additional listing of Exercise of Executive’ Share Scheme (849,000 units, at MYR0.340)
Event 2: One of the key Directors sold his share of 500,000 units at MYR0.890 (the current market price)
Event 3: The same Director, bought 600,000 units at MYR0.340 (the ESOS price) – I guess this is the ESOS given to him. Making a FREE MONEY about MYR275,000, just by selling at 0.890 and buying it back at 0.340.
As a key player in the company, he should have confidence in this company. I would expect the Director to keep and raise his stake in the company, rather than making money from the open market.
How would you evaluate this act and this company?
Thank you.

Song StoneCold replied 8 years ago

Khuen , how u add a profile pic?

Khuen replied 8 years ago

Hi Song, about the Profile Pic, we should talk offline. Please email me and I will guide you.

1 Answers
Victor Chng answered 8 years ago

Hi Khuen,
I would personally avoid management who trade their shares for the sole purpose of profit like in this manner. When we invest, we generally want to invest long-term in a company, hence the management is very important. Like what you mentioned, I agree that the director should be increasing his overall stake in the company instead of taking advantage of his ESOS to turn a quick profit.