Archive for January, 2017
We are tempering our near term outlook for Remark Media shares due to the continued selling by company insiders. While we remain bullish on the long term outlook for Remark based on our belief that its current share price does not reflect the long term potential value of the company’s assets, we think there may be more weakness in the near term as investors digest the latest round of insider selling. A second round (following an early round of selling filed last week) of selling was just disclosed and these filings answered two questions that had been a big talking point among Groove community members in recent days –
1) Who would sell Remark shares at $2.93?
2) Who would be in such a hurry to sell their Remark stock on the very day that the company announces a partnership with one of the largest and fastest growing companies on the planet?
The answer is Remark Media’s Chief Financial Officer. While insiders sell for many different reasons that often have nothing to do with the company’s prospects, we find the most recent sales to be very disappointing, as the form 4 reporting our Chief Financial Officer’s second round of sales in two weeks indicates that his sale transaction “painted the tape” at $2.93 last Friday and the Monday transactions were clearly part of the major dump that occurred on the gap up that greeted the Monday morning news of our enterprise data solutions venture with Alibaba. While we do not believe these sales will be viewed as running afoul of SEC regulations, the timing and price are quite discouraging and make the possibility that the company may be selling shares to Aspire Capital as part of the agreement that allows the sale of 50,000 shares per day at these low prices seem more likely. While we have hoped that the company would halt such sales with the share price this low, the continued selling by key insiders and recent higher trading volumes require that we consider that possibility until we can definitively know otherwise.