Conference 7.286::digital

    
    Does the insider trading notification apply to preferred stock?
    Could these folks have sold the common stock shares with the intention
    of purchasing the preferred when it issued?
    
    
    

    

    Two of the 4  VPs *sold* their shares some days *after* Salomon Bros.
    upgraded digital stock from *hold* to *buy*.

    � thomas �


> Digital - Stock up on earnings forecast
>	{The Boston Globe, 2-Mar-94, p. 42}
>   Digital stock rose sharply after a Salomon Bros. analyst said he expected
> the company would show a smaller loss in fiscal 1994 than previously
> estimated.  Trading was heavy with 3.6 million shares changing hands, making
> Digital the fifth most active stock on the new York exchange.  Salomon analyst
> John Jones estimated in a research report that Digital would post a loss of 90
> cents a share for fiscal 1994, 61 cents less than previously estimated.  He
> raised his estimate for a fiscal 1995 profit by $1.83 to a #2.33-a-share
> profit.  Jones also upgrade his recommendtaion on Digital to a buy from a
> hold.
>
>                       VNS COMPUTER NEWS                                

Why am I not surprised?


/Paul.

    
    Listen guys, this is getting plain silly.

    VPs sold their stocks few months ago, it's their private business, the
    rules were followed , this is why the sales are known .

    Last sale was of lamentable size, 500 shares.

    At least some VP have right judgement and business instinct.

    				w

    So maybe we should give those four a chance at running the company?
    
    Charles

    I dunno about it being that good business sense.  A lot of folks at
    Digital are probably asking themselves, "If the VPs aren't investing in
    this company, why should I?"  Or, if the VPs are so desparate for cash
    and have managed their own finances so poorly that they have to sell their 
    stock, how can I trust them to guide the company?  Or, if the VPs think
    the company is going down the tubes, why should I stick around?
    
    I don't think it makes good business sense for the leaders of the
    company to appear to divest themselves of the company and still
    maintain credible leadership roles.  Seems like a career-limiting move,
    to me.
    
    Steve 

    Please - do NOT assume that, when an officer sells stock, that it's
    insider trading.  Any of us could be accused of insider trading if we
    bought or sold stock based on knowledge that gave us an advantage.
    
    It's my understanding that corporate officers must register with the
    SEC when they want to sell (not sure if there's a min/max limit).  This
    registration is done far in advance so as to avoid any conflict of
    interest.  They don't have the same flexibility that we have to just
    call up and sell on the spot.
    
    Anyway, please be careful NOT so associate VP stock selling with
    insider trading.  Would -you- want to be accused of such an illegal act
    and then have people forward a note around the entire company?  It's
    just not fair.
    
    /Chris

>>...and Lawrence Cabrinety sold all his 503 shares on March 23rd.
Isnt it usual for chief officers of a company to own a fair amount of stock?
According to the article Mr. Cabrinety doesnt own any now. Does this indicate
that hes getting ready to leave or ?

RE: 3015.1 by MIMS::PARISE_M "Profitability?...fawgeddaBOW'dit!"

> Could these folks have sold the common stock shares with the intention of 
> purchasing the preferred when it issued?

Unlikely.  "Preferred stock" is basically a bond,  with higher risk than a
straight bond,  and similar to lower interest rate than a straight bond.

If the buyer a corporation,  the dividend is (mostly) tax free.  Corporations
would rather buy preferred stock than a bonds as a way to invest their cash.
    
If the buyer is not a corporation,  the preferred stocks of companies in
trouble are sometimes interesting speculations.  This is a very high risk, 
very high return game,  not for the faint at heart.

If DEC preferred (in 1999) is selling @10� on the dollar with four years of 
unpaid dividends,  AND digital is finally looking like it's getting its act
together,  I might suggest you buy some.  Might make a lot of money.  Might 
lose every last penny you invest.

Otherwise,  don't buy straight preferred stock and don't buy tax-free bonds for
your IRA.


Follow up discussion to ::Digital_investing.


Phil

    What's wrong with selling DEC common stock, taking the loss for
    tax purposes, and purchasing DEC preferred (no wash - diff stock).
    Three weeks later, on April 15, you get an 8.875% dividend on your
    new investment?
    
    

    I suggest we all stop trying to second-guess the intent of these
    Corporate officers. They are each as independent and creative thinkers
    as we all are, and, most likely they each had their own motivations
    for those sales;
    
        "Hmm, sure do like that Porche Targa....
    
        "I can buy 1000 acres of land in mSDAXM, ready for development
         for only $xx per acre if I move quickly on it...
    
        "It's been suggested that my span of control will be diminished
         if we don't make more money than I think we can in Q4, so I'd
         better cash out NOW."
    
    Each of those sounds like a real-life scenario, and we'd probably
    do the same thing under similar circumstances (wish I had THAT
    problem).  <--CASH makes the world go round!
    
    My $0.02 worth on it
    
                                                

Announce a hundred and eighty-odd million loss.

Hear about possible insider trading by some high-level people.

Hear about suit(s?) by prefered stock holders claiming fraud.

No wonder stock is now 18 and change.

Man, what a month. Can I wake up now? This is a dream, isn't it?

    Re. 3015.12
    
    The sale of stock by the four VPs was most emphatically NOT, repeat
    NOT, on LIVE WIRE.  Perhaps you are confused with the story that
    was posted earlier this month, about Digital's preferred stock
    offering.  The article answered some of the most-asked questions
    about preferred stock.
    
    Kate Nelson
    Editor, LIVE WIRE
    Corporate Employee Communication

    heaven forbid any real world news about Digital get into Livewire

    
    Re: .13
    
    >Hear about suit(s?) by prefered stock holders claiming fraud.
    
    What is this about? 

    The distance in time between the preferred stock offering and the
    quarterly results was relatively short. Any time someone loses
    money, they look for someone to sue to get it back (since assuming
    risk is not something that risk-takers are willing to do). So
    they're suing DEC, claiming they were bamboozled (I think that's the
    correct technical term).

Re:>>                <<< Note 3015.15 by 58323::NELSONK >>>
>>                     -< in LIVE WIRE -- NOT!!!!!!!!! >-
>>
>>  Re. 3015.12
>>    
>>  The sale of stock by the four VPs was most emphatically NOT, repeat
>>  NOT, on LIVE WIRE. 
        
        It was (that's WAS) where I read it:
        
+-+-+-+-+-+-+-+                                                 -----------  
|d|i|g|i|t|a|l|                                                  LIVE WIRE
+-+-+-+-+-+-+-+                  DIGITAL NEWS                   -----------


    FOUR DIGITAL VICE PRESIDENTS SOLD SHARES BEFORE DISCLOSURE OF LOSSES
                                                                      
    Stock Exchange data indicated that the four Digital vice-presidents who
    unloaded stock during the company's unexpectedly weak third quarter
    sold on average 52% of their holdings. Richard Farrahar sold 22% on
    January 25th, Ilene Jacobs sold 68% on February 11th, Enrico Pesatori
    sold 20% of his shares on March 22nd and Lawrence Cabrinety sold all
    his 503 shares on March 23rd. Laura Conigliaro, an analyst with
    Prudential Securities commented "It really just underscores the
    problems. I think management can turn the company around, but the
    question is, what will constitute success? The first step is finding
    stability, finding ground zero, and then seeing the company grow
    predictably."
    Wall Street Journal/Europe, London. 20th April 1994

                         Digital Internal Communication               1 More->

    re: .18
>   Any time someone loses
>    money, they look for someone to sue to get it back (since assuming
>    risk is not something that risk-takers are willing to do). So
>    they're suing DEC, claiming they were bamboozled (I think that's the
>    correct technical term).
    
    	Actually, this sounds rather encouraging. They are spending money,
    and forcing DEC to spend money on a lawsuit, while they still hold DEC
    shares. If they win their case they might force DEC into bankruptcy 
    and then they are not high on the list of creditors, and they have 
    their own costs that they may not recover. If they lose the case then
    they certainly lose their own costs, and DEC's costs go against the
    value of the preferred shares that they still hold.
    
    	Having written that, I am not sure if anyone stands anything to
    gain except the lawyers, but I am pretty sure they stand to gain more
    from just sticking with their shares then from forcing DEC to go
    bankrupt, so they must be very confident that DEC will not go bankrupt
    in the near future.

    Insider trading -- bah...
    
    Last June I convinced my wife to save half the stock from the stock
    plan -- Keep it I said.  I know that Digital will post a profit -- I've 
    heard it, I've seen it... We'll keep the stock until the numbers
    get posted -- Make a killing I said -- at least 10 points..
    
    So I waited.  We needed the money but bills but I held on.  Stock
    hung at $39-42 for the month of July ....
    
    Then it happened.  Almost two months after FY ended, we announced 
    the Q4 numbers -- A Profit..  I was elated.. excited, the 
    stock was going to go up and I was going to get at least 15% 
    for a change....
    
    That Day IBM announced the biggest loss in the history of the 
    computer industry.  DEC's good numbers were sucked down into
    the hole of losses and bad feelings against all technology stocks..
    
    BTW  IBM went up 4(or 5?) points that day on the theory by 
    Wall Street pundits that it had hit bottom and was now well
    positioned to grow into the future.  DEC lost 4 points...
    
    Go Figure..
    
    I sold all my stock the next day... And got out of the stock program,
    I don't need the grief and aggravation for 10-15%...
    
    
    VPs... I'd tie their compensation to the Stock plan except for modest 
    salaries -- but I'm just a peasant here, not even a stockholder 
    anymore... When is the BOARD going to do something real about this.
    
    Say it ain't so Joe, just say it ain't so...Cause I've got the right
    to know...
    
    
    John Wisniewski

re .22

>    VPs... I'd tie their compensation to the Stock plan except for modest 
>    salaries -- but I'm just a peasant here, not even a stockholder 
>    anymore... When is the BOARD going to do something real about this.
>    

I couldn't agree more.  Personally I was impressed when Lee Iacoca (sp?)
took over at Chrysler for a salary of $1.00.  I know the guy made a *killing*
in stock options, but he also did a lot to save a dying company.  I didn't 
put this note here to start an Iocaca debate; lets just say that I'd be more 
motivated seeing the CEO betting his salary on the health of the company 
than taking a 20% pay raise when the bottom line here is ~2%.

    
>    I sold all my stock the next day... And got out of the stock program,
>    I don't need the grief and aggravation for 10-15%...
    
    It's your choice ... but IMO you're just giving away a 1.5% bonus of
    you use autsell ... there is no aggrevation or risk that way,
    
    Greg
    

RE:                 <<< Note 3015.24 by ISLNDS::YANNEKIS >>>

     Too true.  If you're not in the stock plan, you're throwing money away.

                                     Greg

    
>     Too true.  If you're not in the stock plan, you're throwing money away.
    
    That's what I said (with one typo) ... using autosell with no risk is a
    1.5% bonus just sitting waiting for the taking.  Personally I can't
    believe anyone who can afford the cash flow hit doesn't take advantage
    of the plan.  
    
    Greg
    

    How does one setup the autosell option?
    
    --- Gavin

>                    <<< Note 3015.26 by ISLNDS::YANNEKIS >>>

    
>>     Too true.  If you're not in the stock plan, you're throwing money away.
    
>    That's what I said (with one typo) ... using autosell with no risk is a
>    1.5% bonus just sitting waiting for the taking.  Personally I can't
>    believe anyone who can afford the cash flow hit doesn't take advantage
>    of the plan.  
 
    
    I've never got the 1.5%  it's always been 1.1, 1.2, 1.x
    Something always drives down the cost the day of the sale
    (rumor or Alpha chips being defective, IBM passes gas over a 
    gallium chips -- something always drops the price a couple points...)
    
    
    My money is in my 401k At least there I know I'm gambling on 
    more than DEC stock... And it's pre-tax..
    
    
    They can keep the bonus...  It may be stupid, but I don't have to 
    deal with the disappointment of watching stock drop the day
    of the employee sale... again...
    
    JMHO
    
    John Wisniewski 
    
    
    

    re .27
    
    VTX IS, select Sell Stocks, and read the directions (esp. commonly
    asked questions)

    It's interesting to note that:
    
    a) Ed Lucente bows out not having sold his stock, and 
    b) Pesatore, who did sell stock, steps into his place.
    
    Laurie.

    
>    I've never got the 1.5%  it's always been 1.1, 1.2, 1.x
>    Something always drives down the cost the day of the sale
>    (rumor or Alpha chips being defective, IBM passes gas over a 
>    gallium chips -- something always drops the price a couple points...)
    
    Are you calling up the day of the sale and putting in your sale order? 
    Or have you pre-arranged an immediate sale?  I pre-arrange an immediate
    sale and I don't believe I've ever lost as much as you have.
    
    
>    They can keep the bonus...  It may be stupid, but I don't have to 
>    deal with the disappointment of watching stock drop the day
>    of the employee sale... again...
    
    For the average person reading this file the 1.5% bonus is probably
    worth about $750 yearly (based on 50k salary).  Let's assume we lose
    10% of that bonus because of price drops on the day so we end up
    only getting $675.  So the options are
                                                    
    1) Get 0$
     or 
    2) Get $675 when I was expecting $750.
    
    I'll take 2) thank you very much.  BTW 2) represents a return of about
    54%/year on your money even after assuming a hit on the sale day.  (No
    hit comes out to 60%/year).  
    
    If you want to choose 1) that's your business. 
    
    Greg
    
                                                                      
                                     

                                                    
>    1) Get 0$
>     or 
>    2) Get $675 when I was expecting $750.
    
>    I'll take 2) thank you very much.  BTW 2) represents a return of about
>    54%/year on your money even after assuming a hit on the sale day.  (No
>    hit comes out to 60%/year).  
    
>    If you want to choose 1) that's your business. 
    
>    Greg
    
 Yes it's my business and the company can keep it...  My gift to them... 
    
    I know the numbers and my exess money is in the 401k save program pretax -- 
    
    and I don't think about it....  I'm tired of the bad news,
    I'm tired of stock tracking, I'm tired of hearing all the
    complaints about folks who buy and didn't sell for one 
    reason or another and continue to lose money on Digital Stock......
    
    John Wisniewski
    
                                                                         
                                     
 End of note