BDSI Insider Selling Was a Blessing for Investors

BDSI: A comment from Bluesbuff regarding the insider sales at BioDelivery Sciences (BDSI) earlier this year:

Vinnie,

When I charted BDSI I noticed massive Insider Sales by "beneficial owners" and directors in June and July, when the stock was in the range of $6 to $7. Isn't that a red flag to be concerned about?

Bluesbuff

VFC's Take: I've commented on these insider buys quite a bit since the summer and I maintain my position that these sells are a non-factor for the stock. Click HERE to read my reasoning, as I dedicated an entire post to these sales on June 23rd.

The insider sales occurred before the FDA approved Onsolis, but the FDA's decision was due to have been announced before those sales took place. My own speculation has me believing that insiders were awaiting results before selling, but the FDA delay made that impossible.

When discussing insider sells, I always try to remind people that insiders are people, too - they have events that come up in their lives that may require additional free capital just like you and me. Whether it's a medical emergency, a tax bill, a new boat, a car or a vacation, these guys and girls need to free up some money sometimes, too. I usually have no problem with insiders that take some money off the table after a nice run in their stock because I would do the same thing.

You never know when airplanes will hit towers or when a sub prime mess is going to send the markets tumbling. Insiders have the right to protect their investments just like anyone else. This is where an investor's own DD comes into play - if you're comfortable in your DD, it's easier to speculate as to why the insiders sold. Sometimes the insider selling is a vote of no-confidence, but I don't believe that is the case with BDSI for the reasons I'm outlining here.

The 'beneficial owners' that you mention are actually hedge funds who had a very rocky relationship with BioDelivery management, according to published reports. When the price spiked during the summer, those hedge funds took advantage and bailed out on a relationship that grew sour. Click HERE for a decent synopsis of the rocky relationship that ended in divorce. The article is a couple of years old, but it'll give you an idea of what was going on behind the scenes.

Here's what is important - Onsolis is approved and the BEMA technology held by BioDelivery Sciences is now validated and real. There are additional products in the pipeline, as the BDSI CEO recently discussed with the TheStreet.com, and things have never looked so bright for the company.

I can't speak for the hedge funds or the insiders that sold, I can only speculate; but to be honest - I'm glad that they sold because investors were able to add shares of BDSI for a price that I consider to be extremely discounted.

Hope this clears up my position on how I feel about the insider sales.

I've also discussed the sales in the following articles:

VFC's Take on the BDSI Insider Sales
Proceed Cautiously With BDSI
Another Week and Still No News
BioDelivery Receives Approval for Onsolis

Comments

[BSbuster]

You know what might be good for BDSI's share price? If you stopped with your incessant stupid posts about it, that's what.

When a low market cap stock is being pumped by some no name, no nothing amateur such as yourself it actually gives the stock a stench of speciousness.

Your opinions are superficial amateur drivel and why yahoo even lists blog posts under "news" is beyond me.

I can go to the yahoo MB and read thousands of equally meaningless posts, why not give those all a "news" heading as well?

2009 Oct 12 04:39 PM

[theparty]

Why so angry, all your 6 comments.


On Oct 12 04:39 PM BSbuster wrote:

> You know what might be good for BDSI's share price? If you stopped
> with your incessant stupid posts about it, that's what.
>
> When a low market cap stock is being pumped by some no name, no nothing
> amateur such as yourself it actually gives the stock a stench of
> speciousness.
>
> Your opinions are superficial amateur drivel and why yahoo even lists
> blog posts under "news" is beyond me.
>
> I can go to the yahoo MB and read thousands of equally meaningless
> posts, why not give those all a "news" heading as well?

2009 Oct 14 11:50 AM