Buying for show

Today, REFR chairman Robert Saxe stepped up and purchased shares of stock as a show of confidence in his company's prospects.

The fact that he purchased all of 500 shares, at a net price of $2,575, gives one a pretty good idea of the amount of confidence he actually has.

It's curious that Saxe managed to pay $5.15 per share on a day where the trading high was $5.11, but be that as it may, the question bears asking, what is the point of making such a tiny purchase of stock?

The answer is found in the promotional rhetoric derived from said purchases. By making relatively large numbers of tiny purchases, insiders, and in particular, board member Dr. Al Malvino, paint a picture of steady insider accumulation, with which they hope to attract institutional interest.

Put another way, it's the one promotable aspect of the company they can control, having outsourced every possible operational aspect to various licensees. So they make certain to keep it as unblemished as possible.

The sad part of it is, that all of these purchases are fully funded by purchases of other sharedholders, so while the insiders take on the appearance of putting their own money up, they really aren't.

After all, they weren't exactly in line to take in any of that million share offering back in February, now were they?