On 7/19/06, Jayson Funke <[EMAIL PROTECTED]> wrote:
When the Boss Gets Option Grants, It's Time to Buy
July 18 (Bloomberg) -- Want to profit like a chief executive officer?
Then buy shares in their companies as soon as the CEOs are given stock
options.
An investor who purchased shares of companies, including Advanced Micro
Devices Inc. and Yahoo! Inc., after they disclosed option awards and
sold the stock three months later could have beaten stock market
benchmarks by 5.2 percentage points annually from mid-2002 through 2005,
data compiled by Bloomberg show. Holding until 180 days after the grant
beat the indexes by an average 4.2 percentage points, according to the
examination of 4,290 grants made by 1,700 companies.
``If these grants are a heads-up that a stock will rise, then investors
should pay attention,'' said Byron Wien, chief investment strategist at
Pequot Capital Management in New York, ...
right. the issuance of options is likely a sign that the stock price
will go up. But relative to that trend, the exercising of options
should depress the stock price.
--
Jim Devine / "You need a busload of faith to get by." -- Lou Reed.
