Vertro Insider’s Buying Now

November 20, 2009 at 4:21 pm Leave a comment

For some time now, a question that has been tossed around frequently among our community members is why there has not been more insider buying of Vertro shares while they are trading so low.  One thing to keep in mind is that Miva/Vertro has a long standing company policy that prevents officers/directors/employees from making open market purchases except during prescribed “windows”.   These windows are set to make sure that they do not run afoul of SEC restrictions on transactions during times when they could be aware of material nonpublic information.

Vertro’s policies regarding officer/director transactions has never been disclosed to the public, so it is difficult to know when the window is actually open.  While most company policies allow for a trading window shortly after the quarterly results are released to the public, there are other restrictions that could impact insider’s ability to buy and sell shares.  For instance, many companies will restrict the amount of shares that can be purchased on any given trading day, with the restriction usually tied to some percentage of the average daily trading volume.

Back to the original question – why aren’t Vertro insiders buying shares with the stock trading this low?  The answer is likely that they were restricted from doing so by company policy.  However, we are now seeing a number of Form 4’s being filed with the SEC indicating that our CEO, Chief Legal Counsel and one director have been buying shares starting one week after the earnings report.  The CEO and Chief Legal Counsel purchases came on successive days, which leads me to believe that they are likely running into some  restrictions on how many shares they can buy on any given day when the trading volume has been as low as it has been the last few weeks. In any case, we believe there will be more purchases from directors/officers in the days to come and we feel this is extremely bullish.

 

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