@Arizona - So far the market appears to be taking the sell-down in its stride.

However, for full disclosure, today I reduced my holding by 25% (RL and SM), taking my RL position in $BOT from around 10% to just over 7% of my RL ASX portfolio. It remains my largest position in RL and SM.

So why did I sell? Afterall, Vince's Performance Share Tax Selling appears reasonable on the face of it, and executives gaining windfalls have to do it all the time.

As we've discussed here before, $BOT is on the cusp of starting to report revenue data, providing early indications of market fit for this product, where the market potential is huge and the competition underwhelming, meaning there is a large unmet need.

But Vince is an industry veteran with other deals behind him, and his $BOT holding will only be a portion of his total wealth.

In my thesis I've stated that I would reduce my outsized holding if I saw Vince or Howie selling significant holdings. And 21% is significant.

But before selling down, I asked myself, what information might Vince have that I don't have?

Answer: they are a couple of months into the patient experience program. So they will have some initial data of patient experience and might already have some preliminary indications on refill rates from patients who first fulfilled their scripts in November.

If the preliminary data significantly exceeded expectations, then we know that $BOT is very significantly undervalued, and that this will become apparent over the next 6 months or sooner.

If that were the case, I'd have thought it rational for Vince to meet his tax obligation via other means. As he is no doubt in the top tax bracket, his tax liability purely from the $BOT shares would most likely 37% of proceeds, or around US$400k by my calculation.

If he thought he is sitting on a multi-bagger, which $BOT has the potential to achieve in the short term in the success case, would he sell?

My Decision

So far, I have been happy to hold an outsized position on $BOT (given its risks). Today I brought my position size to be more in line with other holdings, recognising that in the sale I have realised a >100% gain over 16 months.

@NewbieHK has asked is SOFDRA the answer to hyperhidrosis community? We know the answer to that and it is "no" (clinical trials results make that clear). For a majority of users, it helps reduce the extent of the symptoms to varying degrees. The real question is does it significantly outperform the existing anticholingeric already in the market - QBREXA, a product with very modest sales. Data from Japan would indicate that this is likely to happen, particularly with good sales and marketing. But after 4 years in Japan, with sales starting to plateau somewhat, it is clear that it is not "the answer" for that community.

I am still optimistic about $BOT and its prospects, and I still have a large position.

But Vince has sold down a decent chunk to pay his taxes. Fair enough. But he knows a lot more than I do. So, I have decided to adjust my exposure a little, and pocket some proceeds in the process (for which I will have to pay my own tax bill!)

Disc: Held in RL and SM