Take physic, pomp

Why all the insider selling at MAG Silver (MVG) (MAG.to)?

I couldn’t help but notice that the BoD at MAG Silver (MVG) (MAG.to), the very same people that believe their stock is undervalued by Fresnillo, have been quick to cash out of the company recently and sell large lumps of shares. “That’s a bit weird”, thought your humble correspondent, “I mean, on the one hand they’re telling the world that the FRES.L deal seriously undervalues their shares and on the other hand they’re quietly selling their own shares to a willing world and preferring cold hard cash for their own accounts. What gives?”.

Of course I was perplexed by this, as you could never accuse the management team of any Canadian junior mining company to be A BUNCH OF SCHEMING, LOWLIFE, TWO-FACED CAPITALIST PIGS OF THE WORST SORT (oops! capslock stuck for a minute there..apologies), so there must be a decent reason. Thus I cast the Otto infonet and heard back that the mgmt is selling a few shares “for tax reasons”. So that explains the following, I suppose:

  • Peter Megaw has sold 46,000 shares since May 12th (just after receiving 11,250 options priced at C$5.54, too…ain’t dat lucky?). Also strange is how he only sells his MAG Silver shares but doesn’t touch his shares in either Candente or West Timmins.
  • R. Michael Jones, who holds inside shares in no less than seven companies, has deemed that only MAG Silver is worthy of selling “to pay taxes”, dumping 14,500 shares of MAG.to this month. Oh wow, a 12,188 options handout last month for you too, Mikey…lucky boy.
  • CFO Frank Hallam managed to dump every single one of his 44,500 shares in MAG Silver on May 13th (got over six loonies apiece, too). And hey wow!!! He got 61,797 options granted to him in April, too. Ain’t life grand, Frankie….?
So correct me if I’m wrong here, but (as just one example) a guy like Frank Hallam who was paid C$115,000 for his services in 2008 dumps over a quarter of a million dollars’ worth of stock on the market just after getting a whole heap of newly minted options…and it’s to pay off the tax bill that he himself should stump up on salary, not expect the company (or more precisely the shareholders of the company) to pay via slushy share dealings. Is that right?

Or In Other Words, Sell MAG Silver.

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