Commentary on this week's news; Tivo twists, breaks insider selling rules
There is only one buy of Tivo stock by an insider in 1999. Tivo insiders have only sold for the last four years and it has gotten worse very recently. Tivo insiders sold stock every couple of days between May and July. A greater frequency, length of time, number of stocks and dollar amount than any time in the history of the company. They have sold on non public material information and they have not informed investors. Rules meant to protect and inform investors have been broken and twisted.
Rules were instated recently to protect investors from selling on insider information and inform investors of trades. Two of these reforms are publishing stock sales at the company's website and a rule which can make sales automated by using a plan and therefore sales cannot be based on non public information. Tivo has not published three trades at their website breaking the rule instated days ago. Tivo instated a stock selling plan but after a large amount of selling without the plan and selling a day before the plan was used. This plan, crafted in secret, made sales that occurred hours before non public material information was made public (which under previous rules clearly would have been a third and far more serious infraction) possible and probably legal. Both of these were reported by the Tivo Critic.
It seems what was meant as a sword for investors has become a shield for Tivo insiders. Tivo's planned sales which just happen to coincide with material events seems automated convincing many of the more sophisticated investors there is nothing to worry about. For the large majority of investors because Tivo broke rules about the reporting of these sales they have no idea sales are being made at all. So in what would have been a time for many to ask why is Tivo selling so much stock and investigators to look into insider trades because of questions from investors, nothing has happened at least in part because Tivo twisted laws and in two cases broke them.
The history of this company's insider selling as well stock issues for employees without shareholder's voting as well as countless other stock issues that hurt the price of the stock and of course the most recent breaking of two rules; I must concede the pessimists were right about new insider rules not working. It seemed impossible but Tivo is turning protections into insider shields to not only sell but sell more frequently without retribution. One day will Tivo insider sales be found easily and insider sales truly automated so no one can ever question a sale as the rules clearly intended or maybe (just maybe) an insider actually buy the company's stock? Maybe but it is not happening today. I am the Tivo Critic.
July 4, 2003