On making tea and timing options…
Making a good cup of tea takes a bit of practice. If you steep it too long, it often tastes tinny; too short and it tastes like badly flavored water. Timing stock options also requires careful timing — something I thought about when I came across this 8K filed by Hain Celestial (HAIN) this week.
In the filing, the company discloses handing out lots of stock options to top executives, including 300,000 to CEO Irwin Simon. CFO Ira Lamel got 207,182 options and John Caroll, CEO of Hain Celestial U.S. got 276,243 options. The options were granted at $11.76 — Hain’s closing price on March 11.
Now here’s where it gets interesting. A quick scan of Hain’s chart shows that the $11.76 is near the lowest price that Hain’s stock has hit in over five years. Two days before the options were granted — March 9 — Hain’s stock closed at $11.29, which seems like great timing. Those options, which vest over the next four years, are already worth nearly 16% more.
We don’t mean to imply that this is a case of stock options backdating like Prof. Eric Lie discovered a few years ago and which the WSJ reported extensively on. After all, there was an 8K for all the world to see, as opposed to burying this deep in some more obscure filing. Still, it’s hard to dismiss the fact that this seems like incredibly good timing.
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March 20th, 2009 at 10:19 am
Helpful points given Hain supplies lot of resraurant chains that have been heating up. Always good to know
about supply chain status. Commodity moves can also
impact Hain then on up chain. Room for trickery there.
March 23rd, 2009 at 11:39 am
What was the date of grants last year? Typically, corporations will grant options the same time each year. Ours is the third Tuesday of February. If they’re honest, they do the same. If it’s only 6 months from the last one, I’d be more suspect.
March 23rd, 2009 at 3:02 pm
Just did a bit more digging through SEC filings after several readers wrote in and found this 8-K from last year which granted options on April 1, 2008. So it’s not quite the exact date as last year, though it is close. Still, it seems a bit odd to me.