What's that about rats & a ship?
Dorian brought up some interesting information concerning stock sales by Ari Avrad and Isaac Perlmutter, this past Friday, two people heavily staked in Marvel. Their combined sales were for 6 million shares (4 million from Perlmutter, representing 12 percent of his stake in the company, and 2 million by Avrad, a hefty 29 percent of his stake) is being taken by many observers as a less than stellar sign, coming as it is before the release of Spider-man 2. This dump of stock on the market was significant enough to cause a 5% drop in Marvel's share price.
While I don't share Devon's dismal view of the first Spider-man film, I do agree that, at best, this sudden sale of stock is poorly timed in terms of public perception. For a moment I was going to play it on the optimistic side of the glass half empty/half full view, though, noting that each man retained the majority of his shares... until I looked more closely. Included in the initial stake (what they used to calculate the 12% and 29% represented by the sales) were options - meaning shares they don't own, but are allowed to buy whenever they wish, at a previously set, sub-market price. It could mean nothing - simple diversification, as claimed - but unless each man needed to get his hands on that much money (nearly $77 million for Perlmutter and $38.5 million for Avrad -- beyond staggering sums to at least this mere mortal) the timing is enough to make me wonder about the upcoming movie.
From their side it's not a bad bet, though, as with large stock options in place they can in many ways have their cake and eat it too. They can make money from this sale, re-invest it or whatever as they please, and if the stock zooms upwards with a successful movie in the theaters they can just reach in and exercise their options on more of the stock, since they can buy those shares any time at an artificially low price.
Comments