June 15, 1999 Qwest Executives, Including Founder,Have Been Selling Shares at Lofty Prices
By STEVEN LIPIN and DANIELLE SESSA
Staff Reporters of THE WALL STREET JOURNAL
Joseph Nacchio, chief executive officer of Qwest
Communications International Inc., said Monday he wasn't
concerned about the 24% drop in the company's stock price
after bold bids for US West Inc. and Frontier Corp. were
announced.
But then, he and other Qwest executives,
including founder Philip Anschutz, have
been selling large tranches of stock of the
Denver highflier at loftier prices.
The sales could hurt Qwest's ability to
persuade Wall Street that its offers are
better than the friendly deals on the table
from Global Crossing Ltd. After all,
some investors and rival investment
bankers say, it could be harder to make
the case that these bold bids are great for
shareholders if Qwest executives are
dumping stock.
While Qwest executives still own large stakes in the
company, they have cashed in a lot of shares recently. Mr.
Nacchio, an ex-AT&T executive, pocketed more than $40
million by selling 900,000 split-adjusted shares from April
23 to April 27 for $45.60 to $47.26 a share. That's well
above Qwest's closing price Monday of $34.125, down
$10.75 in Nasdaq Stock Market trading. The sale reduces
Mr. Nacchio's actionable position -- common stock plus
exercisable options -- by 15%. In addition, Mr. Nacchio filed
an intention to sell 100,000 more shares on May 11.
In a separate transaction, Mr.
Anschutz sold 33.3 million shares of
Qwest stock to BellSouth Corp. for
$47.25 a share, or about $1.5 billion,
through the Anschutz Company. The
sale, completed on May 27, was part
of an agreement that gave BellSouth a 10% stake in Qwest.
Mr. Anschutz is the largest shareholder of Qwest and
controls the Anschutz Company.
Explaining Mr. Anschutz's sales, Qwest spokesman Tyler
Gronbach said, "Phil had a large amount of equity and still
holds about 40% of the company. By selling to BellSouth he
was able to liquidate his holdings without impacting the
marketplace."
Indeed, Mr. Nacchio has consistently sold shares, but the
number of shares sold has ballooned this year. His sales for
all of 1998 totaled 970,944. So far this year, he has sold
1,418,516. Mr. Nacchio parted with 518,516 shares in
February, followed by 900,000 in April, according to First
Call/Thomson Financial, which tracks insider activity.
Mr. Nacchio said in an interview that the decision to
gradually sell his holdings was made by the board. He said
his sales this year were accelerated because he started later in
the year last year. He said Mr. Anschutz was asked to sell
both in November and more recently, when BellSouth made
its investment. "BellSouth didn't want a dominant
shareowner," Mr. Nacchio said.
Five other Qwest insiders disposed of 590,000 shares in late
April, in some cases significantly reducing their holdings.
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