The charades and shenanigans by insiders at Sirius Satellite is fun to watch, especially if you are NOT a shareholder.
Back in January we wrote about Howard Stern’s massive stock grant and and his surprise filing to sell all 34 million of his shares (he has not sold any yet; maybe he should have, the stock has gone from $6.50 to $5.11 today, a decline of 21%)
This filing embarrassed his longtime mentor and current Sirius CEO Mel Karmazin. Karmazin felt like he needed to make a “statement buy” on the open market to support the stock. He purchased 1 million shares at a price of $6.2085 per share.
That was the last purchase by a Sirius insider. In the same time period, insiders have sold 42.4 million shares.
A quick look at the actions of CFO David J. Frezar tell the story.
What was he saying?
Feb 28: Frezar rejected speculation that Stern’s impact on subscriber additions would be over by the end of the first quarter. “As time goes on, people will continue to come to programming, whether it’s Stern, the NFL or [other content],” he added. Sirius shares fell 2.3% to close at $5.11.
What was he doing?
28-Feb-06 9,273 SIRI Sale at $5.22 per share (Proceeds of $48,405)
Two weeks later,
14-Mar-06 264,593 SIRI Sale at $4.4503 per share. (Proceeds of $1,177,518)
The 52-week low for the stock is 4.36. Since when do insiders, especially CFO’s, sell at or near the bottom?
When they are handed 364,310 shares at ZERO cost in the previous twelve months, that’s when. Why would he care if the stock is in the low four’s or the high seven’s? He didn’t pay anything for his stock, it is all gravy.
When insiders behave like pigs, investor’s should look for the exits.