Monday, April 14, 2014

Mr. Frazier's Recent -- And Definitively Tiny -- Stock Sale Means... Nothing.


The clearest message here is that. . . there is no message -- we should infer nothing -- up, down or sideways -- about pending Q1 2014 Merck results, from his transaction. Why?

Well, of the most moment, the sale (the disclosing SEC Form 4 is linked here) represents less than three per cent of all his outright Merck holdings, and less than one and a half per cent of all his direct and "rights to acquire" stockholdings.

Second, just like the GC's transaction of a couple of weeks back, Mr. Frazier's was pursuant to a prearranged/automated plan. Mr. Frazier didn't control the timing here, in any meaningful sense. He did raise a half million dollars, by flipping a small bit of his options, but nothing more. Y A W N. . . Here is one press account:

. . . .Kenneth Frazier unloaded 10,047 shares of Merck & Co. stock on the open market in a transaction dated Thursday, April 10th. The shares were sold at an average price of $57.24, for a total value of $575,090.28. Following the completion of the transaction, the chief executive officer now directly owns 310,494 shares of the company’s stock, valued at approximately $17,772,677. . . .


My guess? Tax Day is tomorrow. He is paying some taxes, and only incurring capital gains rates -- on this series of sales -- so his tax burden on raising the cash is minimized. Snow is due here later this morning. Fabulous! What's on tap for you -- today? Do tell.

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