More on TRID
This the text of a message I posted May 9th on the Yahoo Boards regarding TRID. I was doing my own analysis of the management's greed.
http://messages.yahoo.com/bbs?action=m&board=4687937&tid=trid&mid=20449&sid=4687937
"I just noticed that Frank Lin and his crew have been engaging in some very rewarding behavior.
In 2005 they gave themselves millions of options priced at $0.785. And the company will cover the federal taxes when exercised.
In 2006 they are trying to do the same thing: grant 4M options to 4 executives. There are other incredibly generous compensation arrangements as well.
I've done the math and at today's price, this is $150M in compensation to 4 exectutives in 4 years vesting.
Let's say the company grosses $1.2B over the next 4 years (they are on target to get $200M this year).
These guys are rewarding themselves with 10%~15% of gross company revenue.
I haven't seen anything nearly approaching this level of greed. I am incredibly bothered by it. It is making me re-think entirely my investment in this company.
AM I missing something?"
I try not to be emotional about investing. I try to let facts speak to me.
The fact is that the company and product look fine but the market sentiment has turned negative.
I have been very curious why TRID's stock price turned soft shortly after the amazing earnings release. Perhaps the WSJ article was getting leaked.
In any event, I walk away from companies where the management demonstrates bad behavior. It never bodes well for a company's future.
For example, when APPX's founder sold itself to....itself (yep, you read that right), it was done to benefit only one person - the CEO. I walked away and haven't looked back once. It's down almost 25% since I left.
Same with UNH - if they don't see the problem with giving the CEO $1.5B in options, then something is very wrong at the top.
Or even Fannie Mae which cooked the books to give bonuses.
But this isn't Vitesse, or Fannie Mae, or APPX.
When I look at TRID, I have mixed thoughts. The financials are solid and getting better. Hell, maybe this publicity will stop them from granting themselves more privileged options, thereby making TRID even more valuable.
The loss of market sentiment - could be short term could be longer term. The stock seems to be in a free fall mode. I don't like to fight market sentiment.
I am going to make the following decision - stay in until next earnings release and momentum builds again. I am confident that the financials will look very strong and continue to accelerate. I am hoping that this storm will pass. But I will not keep this company for the long term.
http://messages.yahoo.com/bbs?action=m&board=4687937&tid=trid&mid=20449&sid=4687937
"I just noticed that Frank Lin and his crew have been engaging in some very rewarding behavior.
In 2005 they gave themselves millions of options priced at $0.785. And the company will cover the federal taxes when exercised.
In 2006 they are trying to do the same thing: grant 4M options to 4 executives. There are other incredibly generous compensation arrangements as well.
I've done the math and at today's price, this is $150M in compensation to 4 exectutives in 4 years vesting.
Let's say the company grosses $1.2B over the next 4 years (they are on target to get $200M this year).
These guys are rewarding themselves with 10%~15% of gross company revenue.
I haven't seen anything nearly approaching this level of greed. I am incredibly bothered by it. It is making me re-think entirely my investment in this company.
AM I missing something?"
I try not to be emotional about investing. I try to let facts speak to me.
The fact is that the company and product look fine but the market sentiment has turned negative.
I have been very curious why TRID's stock price turned soft shortly after the amazing earnings release. Perhaps the WSJ article was getting leaked.
In any event, I walk away from companies where the management demonstrates bad behavior. It never bodes well for a company's future.
For example, when APPX's founder sold itself to....itself (yep, you read that right), it was done to benefit only one person - the CEO. I walked away and haven't looked back once. It's down almost 25% since I left.
Same with UNH - if they don't see the problem with giving the CEO $1.5B in options, then something is very wrong at the top.
Or even Fannie Mae which cooked the books to give bonuses.
But this isn't Vitesse, or Fannie Mae, or APPX.
When I look at TRID, I have mixed thoughts. The financials are solid and getting better. Hell, maybe this publicity will stop them from granting themselves more privileged options, thereby making TRID even more valuable.
The loss of market sentiment - could be short term could be longer term. The stock seems to be in a free fall mode. I don't like to fight market sentiment.
I am going to make the following decision - stay in until next earnings release and momentum builds again. I am confident that the financials will look very strong and continue to accelerate. I am hoping that this storm will pass. But I will not keep this company for the long term.
posted by Andrew at
9:44 AM
2 Comments:
following the rules and having as tight of a stop losses on TRID as you had on TIE and all other stocks would have saved you from over 20% drop on this one
Had enough with TRID. Hit my personal SL of 15%...
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