Comment by gruez | Hacker News Reader

Comment by gruez | Hacker News Reader

>There is a plausible explanation for all this: the VCs shed their stock-holdings on the same day SolarWinds' long-standing CEO resigned.

>The software house announced in August that Kevin Thompson would leave the company though it didn’t give a date. Thompson reportedly quit on Monday, December 7 – news that was not made public – and a new CEO was formally announced two days later, on December 9, the day after FireEye went public on December 8 with details of the intrusion into its own systems.

Why would a VC wait until the CEO resigns to dump their stock, if they already knew that he was leaving? Wouldn't it make more sense to slowly dump it over several weeks/months so you don't move the market? The "plausible explanation" sounds like a convenient excuse, imo.

Because you'd get charged with insider trading if you do.

What is the minimum amount of time that needs to pass between announcements and selling of stocks before it is not considered insider training anymore? 1s, 1 day?

The moment the information is public.

You have to leave a reasonable amount of time to ensure that the information can be priced into the market.

The market's made of computers reading press releases, so that's well under a second.

That's just the market's "gut reaction" so to speak.

“A reasonable amount of time” https://www.bloomberg.com/opinion/articles/2019-12-19/trader...

There have been cases where it happens after a certain amount of time after the announcement, technically, but where there wasn't enough time for speed of light delay to get the information to the place where the trade was executed.

https://www.washingtonpost.com/news/wonk/wp/2013/09/24/trade...

Hmm. In that case it didn't happen after the announcement. If the events have space-like separation, then neither 'before' nor 'after' are valid descriptions.

(And "simultaneously" is right out.)

Good luck telling regulators this, I suppose...

milliseconds, nanoseconds if you can

It's pretty vague. I recall guidance of waiting for two trading days, but that seems pretty conservative. Otoh, who wants to have to argue it with the SEC.

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