Is it ethical for insiders to dump shares into self created price rallies?

The company in question based out of Houston, Texas is ION Geophysical Corporation stock ticker IO trading on the NYSE. If you were alive you would have seen the stock reverse split and then rocket after the company reported they couldn't pay off their debts but were going to stretch them out thus paying more interest and a higher rate for doing so. They have cut almost half of the staff through layoffs to use that new cash to inflate the stock prices from November 2015 to February 2016 and may now be doing so again. Listen to the call here http://edge.media-server.com/m/p/46en7wtd/lan/en

This was not positive news yet the stock went up in price it was due to 2 things insiders pushing the price up with buys and unsuspecting traders hungry for a rallying stock diving in.

When the dust settled it was apparent that with the help of promotion the stock moved to give a area for what we call a boxed trade. Where you buy around your position and sell above your position to give a false sense of liquidity to those who did not pay close attention to the price action and chart.

The major concern of this is simple historically the insiders have acquired and sold completely all of their shares and with the price being well above their average you can assume this has or will happened again.

I will make this short and to the point this company has dropped in adjusted weekly close value of $203.25 to $4.60 yet the insiders took home a combined salary of $3.92 million with the CEO taking 1.38 million himself. So when he filed that he added 70,000 more shares 50,000 at a price of nothing and 20,000 he bought himself for a total average price of $1.095 it would seem apparent that if the stock price should rally there would be a way to liquidate older securities that have now expired their vesting period. Might as well they were given for free back then too. In the last 6 months there has been an offloading of 267,200 insider shares but an even more alarming 9,311,000 shares held by institutions.

In the earnings call the company admitted to actively buying back shares in the last quarter to prevent de-listing at $0.15 do the math on how many pre split shares were bought using $3 million in the companies money from 1 off payments. Transcript here Seeking Alpha Transcript

How is that a company with a chart that is sliding downhill is shelling out such huge salaries for failures or do they not have to meet any accountability tot he shareholders sans institutions?

	2011	2012	2013	2014	2015
Relevant Numbers (Annual)
Revenues	454.62	526.32	549.17	509.56	221.51
Revenue Growth (YOY)	N/A	N/A	N/A	N/A	N/A
Earnings	24.77	63.32	-250.86	-128.25	-25.12
Earnings Growth (YOY)	167.25	155.57	-496.21	48.88	80.41
Net Margin	5.45	12.03	-45.68	-25.17	-11.34
EPS	2.25	5.85	-23.85	-11.7	-34.35
Return on Equity	5.79	13.33	-66.2	-64.61	-20.15
Return on Assets	3.82	8.47	-29.77	-17.31	-4.76

Don't let the earnings growth fool it it was a contribution of a few 1 time things, there is no light at the end of this tunnel yet but don't take my word for it.

Brian Hanson

"Thanks, Steve. Looking ahead we believe that the exploration landscape throughout 2016 as it impacts our business will be similar to 2015. As commodity prices continue to decline and as many of our E&P customers have still not yet finalized their 2016 budgets, we expect our first quarter to be our weakest with improvement expected in the back half for the year. We believe our current liquidity coupled with the results of our cost reduction initiatives will enable us to continue to weather the storm, we do not expect to see early signs of recovery in the markets we serve until sometime in 2017."

Due to this ugly chart, the cash trouble, over paid insiders, toxic refinancing, the stock pumping, past trouble staying above minimum listing price and a myriad of many other issues you can pick from this is clearly Short not a squeeze there will be bag holders on this. Let the dust settle first and do your own due diligence.

Republic Airlines $RJET will be business as usual not going anywhere but up (Pun Intended)

This is not usually an angle on a trade I would take but the harsh reality is while I am by history a technical short seller I do use fundamental analysis to back up a position to see just how profitable a trade maybe if everything hits. Most of my trades due to the time frame I am in them are on the intraday chart and price action.

To most this means nothing they can't read a chart they don't know how to do a value of assets check they don't even know what the chapters in bankruptcy are. Stop here if you don't know the difference between chapter 11 and chapter 7 and go look that up.

The stock in question is Republic Airlines ticker symbol $RJET; they filed for BANKRUPTCY PROTECTION under CHAPTER 11 and the as I said on twitter the stock is getting raided. The shares value tanked to a low of $0.495 from nearly $3.32 once everyone heard bankruptcy.

Don't get me wrong this was the correct play on the first day you get out as high as you can as an investor and you get in as fast as you can as a shorter but days later as I said let the dust settle you read things over and realize or didn't sell and notice the company is not closing doors they say restructuring
http://www.rjet.com/~/media/Files/CorpComm/FINAL%20-%20Press%20Release%20(3).ashx. KEY POINT: SHARE HOLDER INTERESTS WILL BE LOOKED AFTER

Republican has several issues common with many airlines right now under the new flight laws the pilot hours have increased from 250 hours to 1500 before they can sit in the cockpit as a first officer on a regional airline.

1) Republic airlines is a regional airline see the issue coming as it stands now we have a surplus of planes and routes to cover by contract but not enough pilots to do this.

2)They have contracts for route they can no longer maintain due to the new laws on hours.

3)They have orders for more plane to cover these routes they have contracts for but don't have enough pilots for them.

4)How can they get out of these contract and orders without incurring fines and extra costs to do so?

File CHAPTER 11 for the place under the tax code it rests restructuring this allows company such as airlines the opportunity to keep afloat and especially ones that are still PROFITABLE. Yes this company still turns over a profit.

If you look most airlines that went through this were bought out wholly or partly by the partner they were fling for in a time period of 18 months average. If you want to look at companies that took it in stride Air Canada under protection from April 1st 2003 to September 30th 2004 and before that United Airlines December 9th 2002 emerged February 1st 2006 even Frontier Airlines April 10th to October 1st 2009 and little Mesa Airlines January 5th 2010 to March 11th 2011.

Some say the value of assets and parts are even in the range of $10 a share that is a buy for that alone. For me the reason why this is a better long than short is the lowest price has been stable in the $0.60 cent range with over 400,000 share block buys someone is "raiding" the shares after hours. You can follow the money or you can do your own due diligence and see that you have something special happening here.

In tax law you can sell any share for a loss but you cannot buy the same stock back for 30 days. Smart money dumped and is waiting to buy this back for less than they dumped and use the tax loss against the profit. Yes sell high $2s buy back under a dollar you have doubled you money once everyone starts buying back in this usually takes 6 weeks. So if you aren't out now this maybe the best time to add shares of a lower float company that is on sale.

Know I have orders to buy in as my full disclosure.  As while this won't be a squeeze I expect 30% to 40% returns if I get filled at my price targets short term 200% long term from yesterday's close.

If you can file 4 times and be a front runner for one of the political parties in the United States you can weather this storm and emerge in a better situation than when you went in.

For further reading enjoy..

http://www.politifact.com/truth-o-meter/statements/2015/sep/21/carly-fiorina/trumps-four-bankruptcies/