>>Third, all of the insider sales now make sense, and the insiders selling out before a secondary, IMO, casts the impression that management has no confidence in the company's future
I wouldn't say that it says they have no confidence, as I have listened to the past several conference calls and they certainly seem very upbeat and have pretty impressive projections. Don't forget they are projecting a billion in rev's in under 5 years, and they have only sold a portion of their holdings. The problem I see with this action is a legal one. Given how shareholder lawsuits pop up all the time now, I wouldn't be at all surprised to see one here. I wouldn't imagine a company would just whip up the idea of a secondary offering, they have to have been working on this for at least a month or two (or longer). If this had been a 5 or 10% deal, maybe nothing would happen, but selling out in the face of a 25+% dilution seems to be trading on significant material knowledge. I hope this won't happen, as I have quite a bit of confidence in adic and their potential, and am willing to weather this dilution. (and perhaps my own selfish interests regarding some covered calls ) Perhaps this does show that adic did think the stock was ahead of itself a bit, as they were selling personally, and viewed it as a good time to bring some cash into the company as well.
Dave
(Edit: also interesting how DLJ is the lead underwriter, and yet they don't cover adic, while H&Q does, and they are in the shadow) |
