In reply to: mosaic1996 on Thursday 06/12/07 08:07am
I agree with posters that these questions need to be asked.......
Doran's sale of 300,000 shares last week represented 6% of his holding. Dobinson's sale of 100,000 shares last week represented 8% of his holding. Love's sale of 130,000 shares represented 19% of his holding (nb: Love is only non-exec chairman).
It did not escape me that on 31 October, the day before the last Quarterly that prompted the big sell-off, Clements exercised 80,000 exec options and Dobinson sold 250,000 shares, both at around the $3.40 mark I understand.
Cynics are plentiful in the investment community. However, many successful ASX investors and insto's (often not the same thing) are naturally inclined NOT to suspect directors of selling up ahead of bad news, simply because:
- it is such a public thing to do;
- the legal consequences of trading on unreleased company knowledge are so are very serious; and because
- if you really wanted to trade on unreleased company knowledge then there are much smarter ways of doing it.
Why would smart directors risk the negative legal (and shareholder) consequences to avoid a 30% drop in the value of the 10% or even 20% of their share holding they might sell on bad news, particularly if the share price will inevitably bounce back at some stage????
Also, the ROC directors retain large holdings of shares. It is not like they are bailing by selling 60-70% of what they own.
But others will know much better than me what the likelihood is in practice, based on past experience, of directors of companies such as ROC trading personally on unreleased bad news.
Personally, I spend more time following how the value investors such as Merrill Lynch, which recently spent $15 million on ROC (increasing its stake from 6.3% to 8.14%), ultimately drive share prices.
Cheer
ROC Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
