Rampant Insider Selling Raises Red Flags

[Thurston Howell IV]

Rampant Insider Selling Raises Red Flags

NEW YORK - Talk about a double standard. While corporate leaders tout the benefits of investors owning their stocks, many executives seem to be running for the doors themselves.

Selling of shares by insiders — which includes executives and other top officers and directors at a company — has been rampant in recent months, with sales rising to their highest level in more than four years in November.

While no one can pinpoint an exact reason for that run-up, the implication is troubling since big insider selling is often considered bearish for the overall market as well as for individual stocks.

Some $6.6 billion in insider stock sales took place last month, the highest level since the $7.7 billion in sales tallied in August 2000, according to Thomson. Contrast that with the $144 million worth of stock that was bought by insiders last month.


http://news.yahoo.com/news?tmpl=story&u=/ap/20041214/ap_on_bi_co_ne/all_business

[dkofos]

1. Must be the rich bailing out before the next crash.

Is there any historic data to support this???

:crazy: :crazy:

[MrUnderhill]

2. This indicator hasn't been very useful for a few years.

Executives exercising their options as stocks rise has a disproportionate effect on this statistic.

[Warpy]

3. The market has been stagnant for the past year

staying pretty much between 9,500-10,500. Some guys are unloading their stock options to take advantage of things they see appreciating, like gold, fine art, antiques, euros, and real estate.

The only exception to this is the health care stocks. I have a sneaking suspicion they're seeing the writing on the wall as far as Medicare goes. They're already seeing their Medicaid market dry up one state at a time. They're getting out while they can because they know the gravy train is coming to a halt.

[Beetwasher]

4. Uh Oh, Getting Their Money Off The Street

Duck and cover. Shit, this makes me nervous that something is going to be literally blown up soon...