I am allowed to Buy stock in a company I sell to?

Question

I am in the manufacturing industry and I am selling equipment to a company. Am I allowed to buy stock in this company? Is this insider trading? I am new to stocks...

I sold the equipment to this company, the total was about 2 million dollars. I only bought like 100$ worth of stock...the equipment wont be in their facility for another year...is this allowed? It is not a secret or anything that they bought this equipment...I dont think anyways...we can tell whomever.

Answer 1

It might not be insider trading, but it is a conflict of interest.

Answer 2

It is only insider trading if your specific sale is unusual and will have a certain and material impact on the company's earnings. For example if you sell a newly patented device that will double the firm's revenues then you cannot buy stock until the firm announces publically that it is going to sell this product. On the other hand, if you sell nails to a manufacturer of furniture, then that is not material since everyone already knows they buy nails and that is an ordinary element of their business.

If you are going to materially alter the future of that firm and no one else knows, then you may not buy. If you are a supplier of ordinary or routine supplies to a firm or you sell new materials, but the sale isn't going to cause a material change, then buy or sell all you like, you are not an insider.

One note, there is also a jurisdictional issue here. For example, if you are in the Northern Judicial District in West Virginia then you would never have counted as an insider even if the sale would result in material changes. If you are in New York you would be an insider. Different local courts define the term differently. There actually isn't a national definition, each district's common law applies here.

Answer 3

Possibly. If you know something that the general public does not and that would affect the value of the stock, or that will affect the stock price when it becomes known, then you cannot buy or sell the stock. For example, if the company tells you that they need to buy a lot of equipment because they are expecting a big order, from which they will make lots of money, you cannot buy until the expected big order becomes public. Conversely, if the company owes your company money and tells you that it cannot pay because it has no money left, and the rest of the world thinks that the company has lots of money, you cannot sell until its impending bankruptcy becomes public.

Answer 4

The simple answer is yes. The only problem that would arise if you had been told by an officer of the company that something was about to happen.

As far as conflict of interest that is silly. I had a great fun job for an old guy looking for something to do. I was a "weekend warrior" for Epson printers. I worked in Best Buy. I sold and promoted Epson products, I also owned Best Buy.

Answer 5

it particularly is termed day paying for and merchandising. There are some businesses that have great computers that purchase and sell billions of shares daily making pennies in income on each and every. you're able to desire to purchase and sell as many situations as you like and as many shares as you like. there is in basic terms single hassle: in case you purchase and sell over 10% of the agency inventory value then you will have scrutiny with policies because you may create a warp or a dent interior the agency's funds and additionally make a inventory paying for and merchandising frenzy. i do no longer think of you're able to desire to problem approximately it nevertheless except you have billions of greenbacks on your account.

Answer 6

"Insider trading" means trading by company officers in one's own company stock based on non-public information.