
Inside Information and Kodak Stock - Feynman37
https://www.chartfleau.com/kodak
======
2bitencryption
Is a person still at fault legally (or morally) if they make trades on
information that is very public (i.e., "a news reporter tweeting about it to
all his followers" public) even if it is not _supposed_ to be public?

Is that "insider" trading? Or is that "I follow News 8 WROC Rochester on
Twitter" trading?

~~~
Drip33
Take it further. If you witness a car from Tesla or any other publicly traded
corp spontaneously combust on the side of the road and you know it will result
in massive recalls before the general public and then short the stock, is that
insider trading too?

Edit: Or use satellite images to see when companies are receiving big
shipments, sending out deliveries, or track customers to predict stock prices
and revenues
[https://www.theatlantic.com/magazine/archive/2019/05/stock-v...](https://www.theatlantic.com/magazine/archive/2019/05/stock-
value-satellite-images-investing/586009/)

~~~
refurb
Something similar went to court! You can probably google the details and find
the actual case.

Guy works at a rail yard, he notices that they are spending a bunch of time
doing an inventory of equipment and then a bunch of guys in suits keep
visiting. He assumes someone is buying the company, so loads up on stock and
so does his family.

Company gets acquired and the SEC charges him with insider trading. I believe
he was convicted (nope, went to jury trial), but appealed and won.

His argument was he had no more access to this information than the general
public would (say from watching the yard outside the gate).

Edit: found it!

[https://www.jdsupra.com/legalnews/two-thoughts-about-the-
jur...](https://www.jdsupra.com/legalnews/two-thoughts-about-the-jury-verdict-
in-s-99906/)

Acquitted after a jury trial.

~~~
koolba
> ... then a bunch of guys in suits keep visiting.

I bet it’d be easy to train an image tracking model to find this off satellite
imagery.

~~~
simon--poole
There was a bunch of analysis over on /r/wallstreetbets a while back based on
satellite imagery of roads in China, using them to estimate coronavirus
recovery levels for factories there.

~~~
dzhiurgis
Where do you get up to date satellite imagery?

~~~
DavidPeiffer
[https://www.planet.com/](https://www.planet.com/) has 3-5 meter resolution
satellite images updated daily for almost all the land surface in the world.
Their business model is to launch many lower power and resolution satellite
with a few year life rather than launching a few super big and expensive
satellite.

Clients can then get historical imagery of a target location to track daily
developments (for things like deforestation, crop health, etc.).

------
ve55
As bad as it was this was leaked beforehand, once it is posted on Twitter by a
news report, I would no longer consider it 'inside information'. Still, the
entire scenario is very strange.

~~~
ketzo
Importantly, though, Kodak did _not_ act as though the information had become
public -- they attempted to get the news reports _unpublished_ and keep the
information non-public. At best, this is wildly incorrect bordering on
fraudulent; at worst, it's insider trading.

~~~
Lazare
> Importantly, though, Kodak did not act as though the information had become
> public

That fact isn't important in the slightest.

> this is wildly incorrect bordering on fraudulent; at worst, it's insider
> trading.

It's wildly incompetent behaviour by Kodak, sure, but at worst it's a
Regulation FD violation. (Even that would be a bit surprising.)

It's certainly not insider trading based on what is currently known or even
what's been reasonably speculated.

------
TomGullen
Nice get out of jail free card for any insider traders

~~~
jliptzin
Exactly

------
ericzawo
Some more context here: [https://www.epsilontheory.com/the-grifters-
chapter-1-kodak/#...](https://www.epsilontheory.com/the-grifters-
chapter-1-kodak/#.XyK4NEsqO-4.twitter)

------
paulpauper
Warren Buffett is quoted that you should never sell a stock unless you need
the money. This is why. Companies that seem like they are on the verge of
dying or irrelevance , sometimes pivot or get cash infusions, roaring back to
life. There is no guarantee this happens for all fallen stocks, but I have
seen it happen many times, especially if the company is a large brand that has
fallen on hard times.

~~~
adventured
Buffett very rarely uses such absolutes in a literal way. He has said to buy
with a mindset that you plan to hold a stock forever. It's meant as a mental
tool, to keep you from over-trading, bouncing in and out of positions too
frequently. It's meant to spur greater discipline and better investigation of
what you're buying.

He's very much an advocate of selling if the situation warrants it.

He frequently sells stocks and doesn't need the money. He dumped his airline
holdings (he owned 10% of all the majors) during the pandemic while sitting on
~$130 billion in cash. He sold a large chunk of Wells Fargo recently (a stock
he has liked for a long time). He previously bought and sold Oracle, IBM,
Walmart, and so on. He has made several mistakes messing with oil companies,
including a bad one with ConocoPhillips in 2006 before the commodity bubble
crash.

Buffett is always willing to sell, under two scenarios: 1) he comes to the
conclusion that he was wrong in the assessment that prompted the purchase (a
mistake on his part, as in Conoco); 2) something substantial changes about the
the company or its context for the negative (or otherwise in a way that he
isn't able to understand, something outside his lane).

------
consultutah
With this and the Kodak crypto before, I can’t believe the SEC won’t get
involved...

~~~
TedDoesntTalk
The journalist who posted to twitter will have some explaining to do, if not
something more.

~~~
Lazare
Nope. The press release from Kodak didn't contain any embargo information.
Kodak told the press, but forgot to tell them not to report it.

Just rank incompetence from Kodak.

------
NicoJuicy
The CEO bought about 50 k. shares extra on the dip, while he had 650 k.

The Government gives a penny stock a loan bigger than it's market valuation.

Trump is known for trying to influence stocks.

It's pretty easy to put a and B together. Trump was pleased to announce it on
Twitter ( as usual).

[https://theweek.com/speedreads/840126/trump-might-have-
repor...](https://theweek.com/speedreads/840126/trump-might-have-reportedly-
illegally-manipulated-market-80s)

I remember an article from 1987 that mentioned that traders were starting to
ignore Trump because of market manipulation ( pump and dump schemes). The year
was easy to remember since it's my birth year, but couldn't find the link
again, will look further.

Something about an old fox...

