Bloomberg has a very interesting report on why they believe Google's stock has been falling this year, down about 7 percent this year. They say that Google's executives have sold off a boatload of stock since the IPO.
"Google's top executives have offloaded about $7.4 billion of stock, equal to about a third of the company's starting market value when it sold shares at $85 each in the August 2004 IPO," says Bloomberg columnist, Mark Gilbert. Not only that, he reports "not a single Google insider has bought a single share of the company in the 18 months since the IPO lock-ups expired." Can you believe that!
Postscript From Danny: It's worth noting that at least to me, the idea that the insiders are selling their stock and not buying is unsurprising. They've got a lot of stock. A lot of stock!
Buying some shares would probably be a good PR move, and after an article like this one, I can imagine some of the execs might start doing it. But the point of selling, as the article itself notes, is to diversify portfolios that, for these execs, are ironically unhealthily skewed toward Google.
For the curious, there are various places to see insider sales over times. Yahoo has a nice list here. Note how entries for Eric Schmidt and many others are tagged "automatic." That because, to my knowledge, they have preplanned to diversify their portfolios by selling shares automatically over time. That protects them against accusations of insider sales.
Also interesting are entries like exec Omid Kordestani acquiring 76,459 shares on June 12, 2006. Didn't the Bloomberg article say no big Googlers were buying? Yes -- so what's this? I assume that Googlers might still be gaining shares in other ways, which adds further understanding as to why they might not be buying on the open market.
Finally, it's no surprise that that over the past 18 months that neither founders Larry Page or Sergey Brin have been selling. That's because they already said in 2004 that they'd spend the next 18 months diversifying their portfolios through planned sales.
Overall, insider trades are definitely interesting to watch, and I'm sure Google will take a PR black eye over the apparent lack of purchases. But I think there are factors that don't make it as bad as it seems.
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