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***OFFICIAL CYDY/Leronlimab Thread*** (5 Viewers)

stbugs said:
Huh? There’s literally two things that could happen when you are granted stock. Sell shares to pay for taxes or pull $700k out of your pocket and pay the taxes with cash on hand. If you don’t have that much cash then you have to sell to cover. Getting a stock grant that vests immediately (if vesting over years no taxes until vested) is like getting a bonus. Your bonus gets whacked as it will be at your highest tax bracket. $1.5M is the top bracket.

There is no timing. See to cover taxes and that’s it. Nothing else to be done.
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When are the taxes due?  On receipt or April 15 next year?

 
krista4 said:
Great post, but the only issue is this.  Because he settled his purchase with shares going back to the company, there's no insider trading aspect.  The company and the "insider" would be deemed to have the same "inside information."  
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Thanks and even better.  It was kinda my point, though.  He isn't selling based on anything he may know about trials, etc.  That was actually an accusation on another board.  So we know it isn't anything like that.  

 
Taxguy said:
Correct.  Depends on the type of option, stock award, etc but this sell to cover is pretty common.  He picks up ordinary income at fmv * number of shares and then sells a portion to cover the tax bill on all the shares.  After this he would have short/long term capital gains/losses from here but his cost basis would be $4.97 on his remaining shares from this lot.
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Name checks out.

 
BassNBrew said:
When are the taxes due?  On receipt or April 15 next year?
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It seems like you guys are conflating restricted stock with stock options.  For the former, it's only when they vest.  For the latter, when you exercise.  I'm assuming (without looking) that this was an option exercise, where pretty much every human alive uses shares to cover the exercise price and taxes on increase.

 
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Jayrok said:
Thanks and even better.  It was kinda my point, though.  He isn't selling based on anything he may know about trials, etc.  That was actually an accusation on another board.  So we know it isn't anything like that.  
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Yes, I agree with you.  Has nothing to do with that; just a standard practice.

 
stbugs said:
Huh? There’s literally two things that could happen when you are granted stock. Sell shares to pay for taxes or pull $700k out of your pocket and pay the taxes with cash on hand. If you don’t have that much cash then you have to sell to cover. Getting a stock grant that vests immediately (if vesting over years no taxes until vested) is like getting a bonus. Your bonus gets whacked as it will be at your highest tax bracket. $1.5M is the top bracket.

There is no timing. See to cover taxes and that’s it. Nothing else to be done.
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I didn't mean to infer that it was bad timing on his part.  Just timing for the company to give him the awarded shares, like, right now, when a lot is at stake with covid trials wrapping up, etc.  Or could it have been already scheduled well in advance?  Still, timing.  

 
krista4 said:
It seems like you guys are conflating restricted stock with stock options.  For the former, it's only when they vest.  For the latter, when you exercise.  I'm assuming (without looking) that this was an option exercise, where pretty much every human alive uses shares to cover the exercise price and taxes on increase.
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Maybe someone could clarify so I know what we're talking about?  I'm not invested (hehe) enough in this to look it up.

 
krista4 said:
I'm probably going to be sorry I blackdotted this, but I've been following anyway.  I am not an investor, but this is just the way it's done all the freaking time.  There is nothing even a dumdum short-guy should make of this.
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Come on kick in a few bucks and let’s go. It’s good shtick if nothing else. 

 
Bob Sacamano said:
I've been thinking about this for a while, and I've come to the conclusion that that's a lot of effing SAEs for a placebo. Isn't this basically just simple syrup? What the actual hell?

I used to think I'd never participate in one of these because of the dangers of a new drug, but now I'm afraid of getting a placebo. Is that normal in these things?
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Yes. They don’t tell you what you’re getting and you basically have to pray for the drug (and that it works). 
 

It’s horrible to me that we are injecting these people with water and giving them false hope. 

 
Capella said:
Come on kick in a few bucks and let’s go. It’s good shtick if nothing else. 
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Steeler said:
Invest an amount you are willing to lose so you can be part of the fun.  And if it moons you can name your next yoga mat after Chet  :lol:
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Honestly I'd do this but don't even know how.  I'm not an individual stock trader.  I'd be willing to get in for kicks if I had an easy avenue to do so.

 
krista4 said:
It seems like you guys are conflating restricted stock with stock options.  For the former, it's only when they vest.  For the latter, when you exercise.  I'm assuming (without looking) that this was an option exercise, where pretty much every human alive uses shares to cover the exercise price.
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It said grant/award for transaction code A so I believe your assumption is incorrect. When you get a grant that’s vested instantly, you have to pay income taxes on the entire amount of stock granted, unlike the option. For $1.5M, that’s a pretty big tax hit. 37% + around 9% for WA state taxes means you basically pay about half. Unless he wanted to spend $700k in cash to cover taxes or didn’t have that cash, selling half for taxes is what happens. 

 
krista4 said:
Honestly I'd do this but don't even know how.  I'm not an individual stock trader.  I'd be willing to get in for kicks if I had an easy avenue to do so.
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Took me abut 10 minutes to open a Fidelity account and use their app to deposit a check.

 
stbugs said:
It said grant/award for transaction code A so I believe your assumption is incorrect. When you get a grant that’s vested instantly, you have to pay income taxes on the entire amount of stock granted, unlike the option. For $1.5M, that’s a pretty big tax hit. 37% + around 9% for WA state taxes means you basically pay about half. Unless he wanted to spend $700k in cash to cover taxes or didn’t have that cash, selling half for taxes is what happens. 
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It would have stunk for him for those to be granted on a day where the stock was $10 and then dropped to $4 the next day.  He would have had to sell all the shares and still owed money.

 
Taxguy said:
It is payroll related so tax withheld now at statutory rates set by IRS.
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What he said. It’s like your normal paycheck or bonus. The only difference is that your restricted stock is in an account like Fidelity and you can have an individual account with cash to cover taxes. Then you get all the shares that vested.

 
stbugs said:
It said grant/award for transaction code A so I believe your assumption is incorrect. When you get a grant that’s vested instantly, you have to pay income taxes on the entire amount of stock granted, unlike the option. For $1.5M, that’s a pretty big tax hit. 37% + around 9% for WA state taxes means you basically pay about half. Unless he wanted to spend $700k in cash to cover taxes or didn’t have that cash, selling half for taxes is what happens. 
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Ok, then if restricted stock, even more sensible to pay taxes by "selling" shares, since your tax would come due on a portion at the grant.  Usually the restricted stock I've seen vests in 1/3 increments.  If that were the case, then 1/3 would be income immediately.  He might also have done an 83(b) where he pays on the stock that isn't vested yet.  That would be notable in that people do that when they are confident the stock is going up.  If you guys could post what actually happened, we could analyze better.  I'm not looking into it given that I generally don't care.

 
BassNBrew said:
It would have stunk for him for those to be granted on a day where the stock was $10 and then dropped to $4 the next day.  He would have had to sell all the shares and still owed money.
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Doesn’t work like that. There would be no money owed. The taxes he paid would have been paid at $10. Taxes would be 50% of shares no matter what price. He would have lost $6 a share on the 50% of shares he still had. He wouldn’t have lost anything on the tax sale.

 
krista4 said:
Ok, then if restricted stock, even more sensible to pay taxes by "selling" shares, since your tax would come due on a portion at the grant.  Usually the restricted stock I've seen vests in 1/3 increments.  If that were the case, then 1/3 would be income immediately.  He might also have done an 83(b) where he pays on the stock that isn't vested yet.  That would be notable in that people do that when they are confident the stock is going up.  If you guys could post what actually happened, we could analyze better.  I'm not looking into it given that I generally don't care.
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Agreed on selling shares. That’s a lot of cash to have on hand. Also, the vesting over years is typical for new employees. In his case as CEO, I think it is more like a bonus in that he acquired them and instantly vested hence the instant sell.

I think we’ve already over analyzed it.

 
stbugs said:
BassNBrew said:
It would have stunk for him for those to be granted on a day where the stock was $10 and then dropped to $4 the next day.  He would have had to sell all the shares and still owed money.
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Doesn’t work like that. There would be no money owed. The taxes he paid would have been paid at $10. Taxes would be 50% of shares no matter what price. He would have lost $6 a share on the 50% of shares he still had. He wouldn’t have lost anything on the tax sale.
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Well yeah, and he wouldn't have sold.  There's no tax event on the granting of stock options.  But geez, it's still not clear to me if you guy are saying he had option or restricted stock.

 
Honestly y’all me arguing with people on useless stuff is way more interesting than this ####. 

 
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Jayrok said:
I didn't mean to infer that it was bad timing on his part.  Just timing for the company to give him the awarded shares, like, right now, when a lot is at stake with covid trials wrapping up, etc.  Or could it have been already scheduled well in advance?  Still, timing.  
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Who knows. Might have been part of his package or maybe it was some sort of bonus. They just did that vote to allow more shares to be issued. Maybe took part of that since he did that large sell before so that they could pay Samsung.

 
stbugs said:
Agreed on selling shares. That’s a lot of cash to have on hand. Also, the vesting over years is typical for new employees. In his case as CEO, I think it is more like a bonus in that he acquired them and instantly vested hence the instant sell.

I think we’ve already over analyzed it.
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I guess he could have been given a one-time, one-off grant, but if there were multiple people getting grants, they'd all have the same vesting periods.  My experience in mapping a lot of these is that the higher-ups are the ones you more want to lock in with vesting periods - otherwise, there's little incentive component.  Again, no one is giving information about what happened here, so we don't know, though.

 
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krista4 said:
Well yeah, and he wouldn't have sold.  There's no tax event on the granting of stock options.  But geez, it's still not clear to me if you guy are saying he had option or restricted stock.
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Not options. Sorry to be blunt, but I’ve said it’s been a grant multiple times. It says that right I. The SEC form. Since it’s a grant that vested he owes almost 50% in taxes immediately, hence selling half to cover the taxes.

 
Capella said:
Honestly y’all me arguing with people on useless stuff is way more interesting than this ####. 
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I’m done now. It’s getting silly. Not sure how much more I can say. The form was in the link on the last page. It’s pretty cut and dry.

 
stbugs said:
Not options. Sorry to be blunt, but I’ve said it’s been a grant multiple times. It says that right I. The SEC form. Since it’s a grant that vested he owes almost 50% in taxes immediately, hence selling half to cover the taxes.
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:lmao:   OK, sorry not to parse your posts against everyone else's who are conflating the two.  I'm new to this thread and have no idea who is right or wrong, so was trying to get clarity around the facts.  I bow down to your knowledge.  :lmao:  

 
krista4 said:
:lmao:   OK, sorry not to parse your posts against everyone else's who are conflating the two.  I'm new to this thread and have no idea who is right or wrong, so was trying to get clarity around the facts.  I bow down to your knowledge.  :lmao:  
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Lol. You’ve quoted me 4 times now and the SEC form was linked. Not trying to be an ### at all. No need to bow down unless you really feel like it. In that case, have at it.

 
Bluto Blutarsky said:
Ducking love learning this stuff. I’m here because of the science this potentially has, but am pretty new to stocks. Not just you but others also have been a great follow through this. 
 

Thank you
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Seconded!  Besides luckily deciding to listen to a random internet stranger ( @chet) for my first ever stock purchase in CYDY I’ve learned a ton here.  Thank you all.  

 
Capella said:
Wonder if there is a 6 am news drop tomorrow to bury this. 
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I really hope not. This is something that gets worse if you try to explain it all. Hope the hit doesn’t hurt badly, but don’t try to explain it more or the hit piece becomes two hit pieces with more ammo.

 
krista4 said:
So now I've looked at the Form 4.  A Form 4 reflects a transaction in stock, but that stock grant would first be reported on a Form 3.  Have you figured out which Form 3 the Form 4 relates to?  It could either be the exercise of an earlier option grant, or it could be the vesting of an earlier restricted stock grant.  In either case, a Form 3 would be required before the Form 4.  Which was it?  I'm not going through all the earlier filings but assume you must have to be sure that this is restricted stock?
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Now I’m not because I have no idea how many form 3s there are and which ones match to these exact shares. I’m tired and frankly don’t care. Feel free to look it up and prove me wrong. I’m good if I’m wrong, won’t bother me at all. Seems from your other post you clearly want to be right. I was just annoyed at you quoting me and being condescending ignoring my replies. Oh well, been fun.

 
Aaron Rudnicki said:
This will just be a funny anecdote when we are all buried in cash.
 

Remember tax chat?
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I don't know if you're referring to my posts, but I couldn't care less about taxes.  I do think it's relevant for people to know if the executive is exercising stock options, cashing out restricted stock- and whether that’s newly issued or existing, or what.  Particularly if it's going to be made a big deal of by dummies (in either direction), getting the facts right seems important.  Since I have no vested interest in this, YMMV.

ETA:  looking more at the form, I think it’s for restricted stock but we don’t know the grant date nor whether he filed an 83(b), so not useful unless someone wants to find the relevant Form 4 for when it was granted.

 
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krista4 said:
I don't know if you're referring to my posts, but I couldn't care less about taxes.  I do think it's relevant for people to know if the executive is exercising stock options, cashing out restricted stock, or what.  Particularly if it's going to be made a big deal of by dummies (in either direction), getting the facts right seems important.  Since I have no vested interest in this, YMMV.
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I just want everyone to get along, and I’m mainly in this for the shtick at this point. 

 
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All right, whatever, thought people were interested in it=info.  And maybe when someone says it's "right there" in the SEC form and he's "sorry to be blunt," but that he has been "clear multiple times" that it is "cut and dry" and discussion is "getting silly," maybe he should have any way of backing up what he's talking about.  It's a good shticky thread so I'll pipe down, since despite all that *I* am the one who is condescending.  :)  

 
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There’s hockey on. I’ll read up on SEC filings tomorrow. (Not really though)

 
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stbugs said:
Doesn’t work like that. There would be no money owed. The taxes he paid would have been paid at $10. Taxes would be 50% of shares no matter what price. He would have lost $6 a share on the 50% of shares he still had. He wouldn’t have lost anything on the tax sale.
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Just because I'm curious and am likely missing something....

Would the shares be granted at a certain time in order to establish the taxable amount?  

If this is a large number of shares, it's unlikely I could sell x% the next day at the exact price of the granted value.  So unless the IRS takes stock as payment, wouldn't you be selling shares at either a higher or lower value to cover the taxes?

 
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