2006-08-24 14:14:18 · 12 answers · asked by brianskellenger 1 in Business & Finance ➔ Investing
When you are the owners and have like 15million shares, selling 100,000 here and there is NOTHING. This is basically exercising their stock options... where many executives really make their salary, not their regular million dollar salaries!
You will also notice that some (if not many or all) are planned sales; just be glad that it's being reported! haha.
2006-08-24 14:44:37 · answer #1 · answered by Swu20 3 · 0⤊ 0⤋
Founders who sell their own stock do it for various reasons. A good way to find out is to look at their past behavior. Let's say David Filo filed with the SEC that he's going to sell 100,000 shares. If you look at previous SEC filings, you notice a pattern that he sells his Yahoo shares in blocks of 100,000 once year. This usually means he's simply diversifying his portfolio and probably putting his money in something that provides a better return or one that is less volatile. He's at the point in his life where he doesn't want to put all his eggs in one basket.
Bill Gates does this all time. Since he literally owns a billion Microsoft shares (okay 957 million to be exact), he'll sell like ten million shares whenever he feels like it or when his kids are due for their allowance.
Selling 10 million shares equates to a puny 1% of his total holdings. Ahhh must be nice eh?
On the other end, let's say in the past he sells 100,000 shares once a year, but the most recent filing shows he sold 10 million shares. This could mean trouble for Yahoo. He's on the inside and is the first to know if something is going to affect Yahoo's stock price. If something is wrong, he's trying to cash out while he still can.
2006-08-26 03:55:12 · answer #2 · answered by ooogleemooglee 1 · 0⤊ 0⤋
It's an extremely well thought out plan for tax and estate planning.
The type of planned sales they're using also is a way for them to completely remove the potential for being accused of insider trading. The SEC has decided that planned sales are exempt from insider trading laws, even if a bunch of stock is sold the day before hugely unfavorable news comes out. As long as they don't stop a planned sale just before favorable news comes out they've insulated themselves.
This type of stock selling is very common among entrepreneurs who are very wealthy but who have nearly all their assets in their company stock. For example, Bill Gates sells approximately 1 million Microsoft shares every month. It's not a statement of their confidence in their company.
2006-08-24 22:02:27 · answer #3 · answered by Oh Boy! 5 · 0⤊ 0⤋
Look at it from a Math point of View. This not exact but close.
Had you bought 1,000 shares of Stock in 1996 @ $10 a share.
You paid $10,000
With the Stock Splits over the years you would now have about 12,000 Shares of Stock @ $29 a share. Your $10,000 Investment is now worth $348,000.
Now consider Everyone Involved CEO's down to people like us. Everyone get the Splits and many CEO's and Executives get stock options and stock gave to them etc., etc.
So, the Bottom line if they started with 100,000 shares, today they have about 1,200,000 shares. They can sell 600,000 @ 29 for a $17,400,000 and have 600,000 shares left for hard times.
2006-08-24 21:36:40 · answer #4 · answered by Snaglefritz 7 · 0⤊ 0⤋
If they've doubled or tripled their original investments, now would be the time to bail out. It's called "quit while you're ahead." What investor wants to push his or her luck by staying in on a stock that's already pushed upwards? Maybe they know something we don't about Yahoo ... or maybe they realize that eventually another stock market crash could occur. The best advice to anyone in stocks is to diversify so maybe they are just looking to put some money into other stocks that are destined to climb.
2006-08-24 21:18:58 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Since the founders get stock option plan, there are almost always able to
buy more stocks in future. They can make always profits and grow richer in
real money and not just in paper certificate. As we all know ,bear market will
bring prices down so it is always good to cash in.
2006-08-28 17:45:32 · answer #6 · answered by Pk D 3 · 0⤊ 0⤋
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Best Wishes && Good Luck!
2006-08-24 21:28:04 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Easy...they know that tech stocks and the market in general is about to take a severe pounding. Watch on November 14th if they are not buying it all back.
2006-08-25 00:38:16 · answer #8 · answered by Anonymous · 0⤊ 0⤋
The usual answer is "to diversify their holdings". Generally though if enough insiders are selling it is usually smart to sell yourself. Who but an insider knows better what is going on inside the company.
2006-08-24 22:47:39 · answer #9 · answered by perdidobums 5 · 0⤊ 0⤋
brand new whips - everyone knows a lambo gets stale once you've driven it for more than a month!
2006-08-24 21:19:43 · answer #10 · answered by X L 2 · 0⤊ 0⤋