TLDR: Insiders gave themselves YOLO OTM options in May, signaling something “big” was on the table, and you could have traded alongside if you were paying attention.
Edit: You don’t have to believe me, but go read the New York Times Kodak article and see who they credit for scooping the story (this is me respecting the self-promotion rule. don’t ban me lol).
Here’s an open secret:
- It’s illegal to insider trade stock options while in possession of material nonpublic information. duh. BUT…
- If the Board gives you stock options as part of a compensation package, IT’S LEGAL (generally).
- So if you’re an insider in possession of material nonpublic information and wanted to make a financial killing, convince the Board to give you out-of-the-money options.
Why does this matter for Kodak?
- In May, the Board of Directors suddenly decided to give themselves a ton of out-of-the-money options.
- When did conversations with the U.S. government regarding a loan begin? In May.
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence or consult your financial professional before making any investment decision.