[linux-elitists] SCOX Insider Trading and Price Action

Willy Smith willy@linuxgazette.com
Fri Aug 8 21:49:02 PDT 2003


IMO this is looking more like a plain old pump-n-dump every day. SCOX went
down again:

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=scox&sid=0&o_symb=scox&freq=1&time=6

Also, here's a nice page which shows the insider transactions against the
chart:

http://cbs.marketwatch.com/tools/quotes/insiders.asp?symb=SCOX&sid=1453151&siteid=bigcharts

Too bad it doesn't have the press conference dates on the bottom, they are
significant!

SEC Filings show that Reg Broughton sold another 5,000 shares on Tuesday
of this week, grossing another $62K+. Here's Reg's insider sheet:

http://cbs.marketwatch.com/tools/quotes/person.asp?siteid=bigcharts&pid=16075169

Note that he was awarded 165K shares in July of 2002. He's sold 60K shares
since 20-June. I'm sorry, but IMO these are not the actions of a person
who believes in the long-term potential and viability of his employer. I'd
say he doesn't even believe in the suit; the nicest thing you can say is
that he's carefully hedging his bets.

The CBS page also shows a planned sale of 10,000 shares by Michael Olson.
Olson sold 8,000 share in July for $84K+, and 6,000 shares in June for
$51K+.

It's also interesting to note that last year most of the insider trades
were purchases.

During the past months, most of the SCOX higher volume days showed upside
price action; now the trend is reversing, the higher volume days show
downside price action. The trade volumes are nowhere near what they were
in June. I'm still waiting for the short interest figures for July, they
could tell a lot about what's going on in with the speculators. If they've
bailed out after the huge short positions taken on in June, there's not a
lot that's going to hold the price up. If they've still got substantial
short positions, then the price could hold up while they cover them.

It's funny how people in the market all of a sudden can realize at the
same time that a stock is basically worthless. I just can't believe it
won't tank, and sooner rather than later, for two good reasons:

1) Insider selling during a run-up does not breed "investor" confidence.

2) I'd say that the people who are buying the stock are not putting it in
their 401K portfolio for the long haul, they're speculators out to make a
quick buck.

While the suit is for $3 billion, the only money that has really changed
hands (besides the unknown SCOX stock speculators) is:

1) Microsoft's $6 million subsidy.

2) The lawyers' fees (unknown).

3) Somewhere between $1-2 million cashed in by insiders.

Note that all three of these parties have gotten their money's worth and
more, if you look at things from each of their respective points of view.
Even if the suit dies tomorrow, they've all done *very* well.

There may be a few trusting souls who've paid for new licenses, but is
that a substantial amount? Probably not.

Cheers,

Willy Smith
Editor in Chief
http://WorldWatch.LinuxGazette.com
Costa Rica

Disclaimer: I am not a securities analyst nor a broker, nor do I have any
equity interest in any of these companies.



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