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Technology Stocks : Webvan Group (WBVN)
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To: Tomato who wrote (301)1/3/2001 8:01:33 PM
From: Bret Masterson  Read Replies (1) of 464
 
There's really little reason to expect insiders (operating execs. or VCs) to buy any shares on the open market:

1)For the most part, the executive insiders are equity rich and cash poor. Also, since the stock has dropped so signficantly, there's a good possibility that many of them are actually in financially difficult straights (e.g. borrowing money from specialized financial firms based on their "paper networth" which has no evaporated, leaving them with large debt overhang.

2)Financial insiders (VCs, etc.) also would not buy on the open market, given the fact that Webvan will need to raise additional funds. They know that if they really do want to invest additional money in the company, they can do so a better risk/reward ratio by waiting, and perhaps investing in some type of convertible perferred shares which protect their downside and maximize upside (of course, us regular investors won't be allowed to invest in those types of "advantaged" securities.
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