Like three-card monty…

Once upon a time, before midtown Manhattan began to look like an outdoor version of your favorite suburban mall, there used to be three-card monty dealers on practically every block. They would set up a cardboard "table" and try to lure passers-by with the hope of making a quick buck just by picking the red card. The three-card monty dealers are largely gone by now. But luckily, we can still play the game at home by watching companies like Red Hat (RHAT).

Just like the three-card monty dealers, the events at Red Hat over the past few days have been almost dizzying to try and follow. Late Tuesday, for example, the company put out their proxy statement which showed that CEO Matthew Szulik exercised $59 million worth of options last year. Three other top executives exercised nearly $17 million in options. There was also a huge cache of new option grants — 700,000 to Szulike last year, with the bulk of those options at just over $15 a share. But even before the proxy came out, the wires were already buzzing about Wednesday’s first quarter earnings which came out after the bell yesterday.

While the early headlines were positive — after all, Red Hat’s own headline on the press release called them strong —  it didn’t take long for the stock to start falling. This morning, the stock is already down over 10%. Needless to say, the news about all those options seems to have disappeared, just like the elusive red card in three card monty.