Ennerole IOC stock buy or ?

[Tree]

InterOil Corporation

2,484,825

5.11

New

0

12/31/2012

On Morningstar.  5.22% ownership reported as new at Y/E 2012.  Any ideas if this is new or bookeeping?

[Movieguy]

Could that be the JP Morgan purchase?

[Tree]

Could that be the JP Morgan purchase?

Could be JP Morgan MG.  They added 6,101 in Q1.  That's a lot of cash and the reported IOC # does fit within the JP #.

JPMORGAN CHASE & CO   03/31/2013    2,669,275     6,101    .23      $216,985,000

[jft310]

This is a what if..Would JP Morgan loan money to Interoil to buy shares in the market to dry up the float and use those shares as treasury stock to pay for the executive stock options as they exercise and hold some of their shares. Keeps the dilution under control as everyone will want a payday .

[Tree]

This is a what if..Would JP Morgan loan money to Interoil to buy shares in the market to dry up the float and use those shares as treasury stock to pay for the executive stock options as they exercise and hold some of their shares. Keeps the dilution under control as everyone will want a payday .

Aren't there a couple million stock options hanging out?  From Oct to 12/31, IOC traded from low 70s down to low 50's.  This would be a brilliant move by IOC if it's not a clerical error by morningstar.  Did IOC become their own new whale, drying the float and will add dynamite to the squeeze and fund their stock option obligation?

[johnwgrant]

A company cannot buy their own shares without announcing a buy-back program. Does InterOil have an announced board-approved buyback program ?

[Palm]

It's a mistake by Morningstar I believe. If you look at the Funds tab that same amount of shares (2,484,825) is shown as "American Funds New World A". Pretty shoddy of Morningstar to show this as New at 12/31/2012 if that's what's going on.
http://investors.morningstar.com/ownersh...html?t=IOC

[Relker]

A company cannot buy their own shares without announcing a buy-back program. Does InterOil have an announced board-approved buyback program ?

IOC promised to buy back shares in CC Q3 2011 with the upfront cash payment. So, it would not be surprise if they do this before the deal announcement with the help of some banks.

[johnwgrant]

IANAL, but, here's info that I found online regarding a company's legal requirements if they want to buy back shares... Although the article is from 1999, the current rules are likely very close to the 1999 requirements.

http://www.journalofaccountancy.com/issu...carthy.htm

STOCK REPURCHASE PROGRAMS CAN POSE PROBLEMS for financial executives because they may raise concerns at the SEC about insider information and stock manipulation.

IF THE COMPANY HAS MATERIAL INFORMATION that has not been made public it should not buy back stock.

BOARD AUTHORIZATION FOR PURCHASE OF that company's stock for the corporate treasury should specify:

The maximum amount of money to be spent, or the maximum number of shares to be acquired.

The rationale for the program.

The time period covered.

GETTING A WRITTEN AGREEMENT from the broker that the program will follow SEC Rule 10b-18 is a good idea. It should specify that:

The company and affiliated purchasers may work with only one broker or dealer on any single day.

The company may not buy on the opening trade on the NASDAQ National Market or during the last half hour of scheduled trading.

The company's purchase or bid price may not exceed the highest current independent bid quote or last independent sale price, whichever is higher.

The company must stay within trading volume restrictions unless it is doing a block trade.

[jft310]

I also think Morningstar messed up , fun to think of other possibilities though even though they are not true.