Today, Fred Hassan went through with his purchase of $2 million worth of Schering-Plough common stock — first announced January 18, 2008, but executed at today’s market prices (Now, was that an unregistered put-option, in favor of the shareholders, as of January 18, 2008? But I digress). . . .
[Here is Part One of my Rant, as a backgrounder.]
▲ One — he essentially used the $2.087 million cash incentive that Hans Bechereer & the board paid him in 2007, for 2006-07 performance, to make this buy — so, in a very real sense, this is actually from the shareholders’ own money — a bet placed with the house’s funds.
▲ Two — when he said he’d do this, on January 18, 2008, the stock closed on the NYSE at 21.28. He promised to spend $2 million. That would have netted him about 93,985 shares.
He waited — to let the markets discover what he knew, re ENHANCE — and waited, for Year end 2007 results — and, then waited, for the ACC Panel debacle to fully-unfold. . . . and now, only now, after Q1 is out, does he “buy in” at $18.26, today.
So, now, he gets 109,530 shares for his $2 million. He gets 16 percent more shares, for his $2 million of “spent” 2006 SGP bonus money. He now owns about 720,000 shares outright.
So — tell me again, now — how was that a “show of confidence“?
[Query whether his open dispute, with Merck, about the veracity of the $700 million fall-off in the Vytorin Joint Venture’s equity income for 2008, makes this “buy” in some way subject to the insider-trading rules. Is there “adequate public information” about the “known trends. . . and uncertainties” of Q2, and Q3, and Q4 “in the public market“, simply because Richard T. Clark explained it, on Monday — or is it considered “undisclosed“, as to Schering’s stock price, at least — because Fred Hassan denied the existence of such a model, only yesterday. ‘Tis perplexing, indeed. I am sure this — as an anonymous hypothetical — will be on an Advanced Securities Regulation final exam, at some law school, one day.]