To be certain, it may all be innocent enough. The proof in the pudding will come when Mattersight's stock rises -- or falls -- as Q3 2012 results are announced in about 40 days' time, now.After the market closed tonight, the General Counsel and Vice President of Mattersight filed an SEC Form 4, disclosing that prior to the weekend, she sold 4,000 shares into the open market, at $6.15.
That may not seem unusual, to the untrained eye. However, there are only 14 trading days left in Mattersight's third quarter. At many (perhaps most) public companies, high-ranking insiders, like the general counsel, are "locked out" from NASDAQ trading within ten days of the close of a quarter -- as a precautionary policy. The thought is, that with some 75 to 80 of the 90 days of the quarter already in the books, executives will already have a pretty good sense of where the "rolled-up" quarter is likely to finish. If Ms. Carsen's trade has not netted her a significantly higher price than that prevailing on Q3 2012 post-announcement morning, she is definitively in the clear. If, on the other hand, $6.15 turns out to be a high water mark for the next 90 or so days, she may well come in for criticism -- as the question would be whether she knew the quarter was so soft that it would cause a NASDAQ price decline on announcement.
So now we wait -- and watch. But I do wonder whether Mattersight has a "closed window" policy for its executives, as the quarter roll up begins. If it does not, Ms. Carsen might again be criticized, for not having one -- since all SEC compliance decisions presumably fall to her office, as a matter of policy, at Mattersight.
As ever, be careful out there. [I do note that Sutter Hill Ventures was a Mattersight buyer, at $5.40, only one day before her sales began. Moreover, her selling price was about 15 percent above where a very savvy inside/control affiliate (at 17 percent of outstandings) investor was last a willing buyer. Interesting.]
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