Power Alley Trivia On Wednesday: An Auto-Generated Story -- About Merck "Insiders" Selling Stock... Is Devoid Of Any Rational Analysis.

From time to time, I run across "stories" -- likely generated by automated bots, or AI, if one prefers that turn of phrase. As I've previously said, the silliest version of these is likely the class that adds up SEC Form 4s totals for over a year, and declares that "insider executives" have lost confidence in the subject company. Poppycock.

In most cases, the seller(s) turn out to be using shares to pay for their exercise of options, or to pay taxes (i.e., to acquire even MORE shares in Merck -- increase their investment holdings -- not reduce them). Geez.

These auto-bots purport to offer "analysis" of financially important trends. But in truth, they usually get it exactly. . . backwards. As here. The "story" simply obscures a. . . non-event, over the past year out of Rahway.

Here is the specific nonsense, of the morning -- for the sake of a complete record, solely:

. . .Insiders sold Merck shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Merck. . . .

They "didn't buy any, on the NYSE" is true, insofar as it goes. But it ignores that these "insiders" EARN shares, in restricted grants, and in options, vesting over time -- from the company Treasury, directly -- in return for their service to the company. In sum, day by day, their NET investment in the company's fortunes, and future. . . increases.

Now you know. Onward.

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