Quote:
Originally Posted by Carl Johnson
Insider Selling Jumps to Highest Level Since 2007 (Update2) - Bloomberg
Insider selling and buying isn't always the right indicator to predict future stock price movement. This article was written back in April of 2009. We all know what happened since.
It wouldn't surprise me CUU test the low it made on June 11 at 1.45, which is also the 200 days moving average.
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While I agree that one cannot trade consistently well based on insider transactions, there is a difference between insider selling and insider buying. Insider selling can happen for a variety of reasons, whether they be for tax deductions, family needs, debt refinancing, taking advantage of a recent rally, or simply to spurge on a new yacht. Insider buying, however, almost always implies that the insider knows something more than that which is reflected in the SP, because buying involves taking money out of some other vehicles (bonds, property, ETFs, or property) and putting it into the stock.
In the case of CUU, though, because that Mexican already has nearly 50% of the shares, I don't really know what he is doing. He obviously cannot dump his share on the open market, so the only other option is a buyout. Without a buyout, his shares are worthless. So perhaps a buyout is in play, but what's not to say that the buyout price is at $1.50? I think most of the insiders, having bought in at $0.10, would be happy with a 15X gain, no strings attached. The retail investor might not be happy with this, but why would the insiders care about them when they own most of the company and therefore do not need their votes?
On a side note, I should have bought into Prophecy Platinum!