NEW YORK (TheStreet) -- In the weeks before his ouster as the CEO of Retrophin (RTRX) , Martin Shkreli was buying relatively small amounts of the company's shares on the open market and using his personal Twitter account to convince investors to do the same.
"Not selling $RTRX. The stock is very very cheap. The revenue generating assets alone are worth [greater than] $25/share," Shkreli tweeted on Sept. 30, the day his departure from the embattled drug maker was announced.
But while talking up Retrophin's prospects publicly and buying some of the stock, Shrekli was selling privately a much larger portion of his drug company holdings. Without public disclosure, Shkreli received almost $3 million in gross proceeds by selling "forward contracts" on his Retrophin stock in early September, according to a filing with the Securities & Exchange Commission made public Monday night.
Shkreli's decision to sell Retrophin stock while telling shareholders and the public he was only a buyer contributed to the board's decision to fire him as CEO on Sept. 30, according to a source familiar with the matter.
Publicly, Retrophin's board has never cited specific reasons for its decision to oust Shkreli, although "stock-trading irregularities and other violations of securities rules" were said to play a role, according to a Bloomberg Businessweek story published the day after Shkreli's departure was announced.
Shkreli has not been accused of breaking any securities laws during his time at Retrophin. Last August, Retrophin's board admonished Shkreli for a series of inappropriate Twitter posts and the discovery that company employees were using alias Twitter accounts to promote Retrophin stock and make short-sale recommendations on other biotech stocks.
The new disclosure detailing Shkreli's selling of Retrophin shares comes at a delicate time. The former hedge fund manager has tried to restore his credibility and tamp down talk about his behavior and executive decision-making by blaming Retrophin's problems -- and his exit -- on the company's board and reporting by the media. At the same time, Shkreli is trying to raise outside investor money to finance a new company, Turing Pharmaceuticals.
For its part, Retrophin is trying to move past the turbulent times caused by its founder and former CEO and stop the slide in its stock price, which is down 63% since April. Retrophin's board installed former Chief Operating Officer Stephen Aselage as the new CEO. A Retrophin spokesman, reached Monday night, declined to comment on Shkreli or his sales of company stock.
Shkreli did not respond to a text seeking comment for this story.
Here's how Shkreli received almost $3 million in proceeds by selling Retrophin shares with delayed public disclosure:
On Sept. 9, Shkreli and an unnamed third party entered into a "prepaid forward contract" under which Shkreli promised to hand over 123,000 shares of Retrophin in two years. In exchange, the third-party buyer paid $1.07 million in cash to Shkreli -- an amount equivalent to 68% of the present value of the pledged Retrophin shares.
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