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?
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.
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