Azul320 From United States of America, joined Jun 2004, 278 posts, RR: 0 Posted (8 years 10 months 3 weeks 1 day 9 hours ago) and read 676 times:
I was online at CBS marketwatch a few days ago, and I realized that MANY corporate Jetblue officials (i.e. President Dave Barger) are selling their hundreds of thousands of shares of Jetblue stock. Is there something going on behind the scenes that we don't know? Is this normal?
PROSA From United States of America, joined Oct 2001, 5439 posts, RR: 5 Reply 2, posted (8 years 10 months 3 weeks 1 day 8 hours ago) and read 629 times:
That link shows insider sales by just one executive, David Barger. He could have any number of reasons for selling, reasions which he is under no obligation to disclose, and in any event seems to be selling only a small percentage of his holdings.
It is true that a flurry of selling by insiders can be a sign of impending trouble. Usually, however, there would be other signs as well, which isn't the case with B6. A much more reliable predictor of trouble is the sudden departure of several top executives "to pursue other opportunities" or "to spend more time with their families." That, however, has not happened with B6.
"Let me think about it" = the coward's way of saying "no"
WearyBizTrvlr From Netherlands, joined May 2004, 58 posts, RR: 0 Reply 3, posted (8 years 10 months 3 weeks 1 day 8 hours ago) and read 616 times:
I don't know the specifics for JetBlue, but in general corporate insiders will tend to sell stock on an ongoing basis; just look at insider action for other companies. They get paid partially in stock or options, which means that once their rights vest, their portfolios end up being very concentrated in just one stock; undiversified portfolios are seldom good. So there's a natural, ongoing selling pressure.
However, they'll rarely be able to sell all of their exposure, as part of the compensation may be deferred stocks or options, so their portfolios will remain exposed to their own stock.
You can only derive signal value from large deviations from trend in insider action, and even that is not a reliable indicator. However, if everyone in management dumps all of their eligible shares, then you might reasonably be able to conclude that something bad is happening.