Fair enough. I see your point. If I can argue that the marginally better price offered by the insider is relevant in the sense that it helps a person holding shares at the time the event materializes but is not disclosed yet, you can likewise make the argument that the marginal improvement is also enough to prompt someone to sell who would otherwise not have sold their shares. That implies a loss. I agree.
LOL - "Show me the victims of insider trading."
- Thread starter sle
- Start date
Here is another argument for the sake of the company:
If insider trades are legal, investors might read too much into certain such trades. Board members sell shares all the time. But because insider trading is illegal, we kind of know that they are doing it for personal reasons (bigger house, divorce, etc) There would be a constant down pressure on the stock because the insiders keep selling their shares for legit reasons.
It would be also easier to manipulate stocks, "he must know something, he is buying."
If insider trades are legal, investors might read too much into certain such trades. Board members sell shares all the time. But because insider trading is illegal, we kind of know that they are doing it for personal reasons (bigger house, divorce, etc) There would be a constant down pressure on the stock because the insiders keep selling their shares for legit reasons.
It would be also easier to manipulate stocks, "he must know something, he is buying."