Google Insiders Bail Prior to Stock Plunge

Townhall.com ^ | October 22, 2012 | Mike Shedlock

[Kaslin]

There is nothing like inside information, provided you are on the inside. But heaven forbid should you be on the outside and act on a tip as did Martha Stewart.

Insider Monkey reports Google Inc. (GOOG): Insiders Sold $280M Prior to Crash

Google Inc. (NASDAQ:GOOG) chairman Eric Schmidt was very active in late September, as he executed 226 transactions in just three days from Sept. 24 to 26, selling off more than 211,000 shares at per-share prices between $742 and $764 per share. He came away with about $158 million.

Other noteworthy insiders are Google Inc. (NASDAQ:GOOG) CEO Larry Page and co-founder Sergey Brin, who had conducted several insider sales in the first half of this month, totaling about $120 million in value and the pair spared themselves about $12 million in combined losses. Brin conducted a series of transactions Tuesday, October 2, selling 83,334 shares at between $750-$765 a share, with a combined value of at least $62.5 million.

Page had been selling shares regularly over several days. Starting October 8, he sold 20,833 shares at $754-$762 a share for a value of $15.7 million; 20833 shares at $744-$760 October 9, for a value of $15.5 million; 20,833 shares at prices between $741 and $746 per share October 10, for a value of $15.4 million; and 20,835 shares at prices between $752 and $758 October 11, a value of $15.7 million.

Also in October, Google Inc. (NASDAQ:GOOG) board member John Doerr sold his 6,000-share holding at between $759 and $762 per share, for a total value of about $4.5 million, and senior vice president David Drummond pared off 568 shares at $759 each for a value of about $430,000.Notable Sergey Brin Transactions

It's one thing to sell a few shares routinely, it's another thing to dump a load right before the plunge.

Here is an edited screen shot of some Google transactions of co-founder Sergey Brin.



Congratulations to Board Member Doerr

Congratulations to board member John Doerr who according to Yahoo!Finance Inside Sales acquired 12,285 shares on September 3 for the bargain basement price of $0, and sold every one of them on the same day, netting a cool $8,251,000.

On September 30, Doerr received 10,966 shares, also for the bargain basement price of $0, and sold every one of them on the same day as well, netting another $8,343,000.

$16+ million in free shares dumped in a month, right near the top, is not a bad month, but Sergey Brin did far better.

On October 1, Sergey had a spectacular day, receiving 83,334 shares for the bargain basement price of $0, dumping every one of them for $750.82 to $765.18 per share, for a whopping net total of $63,167,000.

Happenstance? Inside Information? Or do insiders simply get free shares and dump them as soon as they can?

[Roccus]

I keep some shares of a stock that are worth a miniscule fraction of what they were when the insiders bailed and I was locked in. I save them to remind me to stay away from the market.

If you can’t run with the big dogs, stay out of the yard.

[subterfuge]

I have a friend that was a CFO for several companies as big as google. He said the COOs and GMs for companies like this are almost all as corrupt as the day is long and that they are ruthless.

[zeestephen]

I need to see a lot more information before I condemn these guys.

The author gives us a six week snapshot.

I want to see a 5 year stock transaction history.

Many executives and major shareholders sell their stock - and cash out their stock options - on a regular schedule.

Is this a wildly unusual spurt of sales for these guys?

If so, then shame on them, and maybe “insider” sale laws should be changed.

Re: Martha Stewart

As I recall, Stewart went to jail because she told easily proved lies to federal investigators - with her lawyer sitting next to her!

Hard to feel sorry for a billionaire moron!

[Chode]

did you rear the article??? they received shares on 9/3, 9/30 and 10/1 and in each case sold them the same day... what good let alone difference does a 5year history make???

[thulldud]

As I recall, Stewart went to jail because she told easily proved lies to federal investigators - with her lawyer sitting next to her!

She omitted an essential step: Get elected to Congress first. (Or the Presidency.)

With the correct party affiliation, you're practically untouchable there....

[Smokin' Joe]

“September 3 for the bargain basement price of $0”

Well, that certainly seems like a great price, I gotta say.

Yeah. I'd gladly have paid three times that. (8^D)

[zeestephen]

Re: “What difference does a 5 year history make?”

Well, if they received and sold shares on the 1st, 3rd, and 30th of every month for the past 5 years, I'd say it makes all the difference in the world.

Or, if these are stock options that vested, the price and cash out dates were written into an employment contract, quite possibly years ago.

Or, if the shares are performance awards, for hitting certain price targets, or for hitting certain corporate income targets, then, once again, this was part of an employment contract that may have been written years ago.

My point is valid...

The author gives me a five week snapshot with no context, and he - and you - imply fraud or self dealing.

You may be right.

But without more contract details and a longer transaction history, there is no way you can draw a valid conclusion.

[Chode]

i didn't imply anything other than it just seems odd to me that they get stock for free, and sell the same day... maybe that's common, i don't know