Sydney, I'm calling you on the MD 'dumping' all his shares prior to the bid. It sounds like you're tryign to infer that the MD 'dumped' shortly before the bid was announced. The timing of the MD's on market sale was actually dictated by the predetermined schedule of the tranche 3 employee share plan release in Feb 2012. Can you please provide some back ground on your 'dumping' inference?
In Feb 2012 (about 7 months before the bid was discussed with the chairman) the directors had tranche 3 of their employee share plan released to them. The MD had 1.5m of these available to him in total, with 500k being triggered for release in March 2012.
He proceeded to sell these 500k on market at $1.564. Unless you're a dimwit wouldn't it be logical to bank the cash at that point in time so you can then fund your options exercise of $350k down the track which would increase your wealth by $1.214m if the share price stayed at $1.564, or increase your wealth further should the price go on to increase beyond $1.564 by Nov '13.
The chairman sold 275k on market and kept 225 in his family trust. The other 4 directors kept their shares. If all of the directors 'dumped' their shares and the SP plummeted you could be forgiven for your accusation. I think you can safely suggest that one of 6 directors selling his tranche release on mkt while he has a $350k exercise bill coming down the track is pretty understandble to a logical person. But obviosuly you see it differently.
That left him with 1m in the employee share plan and 1m Nov '13 options with a 35c strike. These numbers haven't changed to date with their being no subsequent employee shares released and without the MD exercising any options.
How much exposure do you think it is reasonable to expect a director to maintain? I think it would be most imprudent for a director to have a majority exposure to the company they are running. Sure it's very romantic to suggest this kind of allegiance and alignment of interests, but I'd say you're a complete moron to over expose yourself to satiate a couple of whingeing short term traders. The MD still has 1m shares coming in 6 months if he exercises his options at 35c, plus another 1m shares to come through his employee share plan allocation (I haven't recently reveiwed the conditions of release - so these may or may not be likely available to him).
Your inference that he's not still exposed to the SP is a little hard to digest.
You're obviously more thorough than me and have more experience in this area than me, because I'm just not seeign it the way you are.
DML Price at posting:
34.0¢ Sentiment: LT Buy Disclosure: Held
