Hi Ray, yes many had said that with Goldman Sachs being such a savvy trading firm that when they went
public it would be signaling a stock market peak of a bigger magnitude. It looks as if insider selling of options,
coupled with the employees being granted more and more options at lower strike prices will put a ceiling on
many companies share prices in the coming few years.
It's looking increasingly like corporate insiders will exercise the options and sell their stock instead of just letting
the options run their course.
I think that the market is in the process of adjusting to the post bubble realities.
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July 4, 2001
Executives at Goldman Selling Shares
By PATRICK McGEEHAN
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A chief financial officer of the Goldman Sachs Group, David A. Viniar has had plenty of practice handling large sums of cash. That experience should be serving him well this year as he takes in more than a quarter-million dollars a day from the sale of his own stock in the firm.
Mr. Viniar is one of several Goldman Sachs executives and former partners who have been selling thousands of shares of Goldman stock in daily increments since last fall. Last week, Goldman filed notice with the Securities and Exchange Commission that Mr. Viniar and 38 other insiders planned to sell about 1.5 million shares the next three months.
Mr. Viniar's planned sale of 100,000 shares would raise the total number he has sold since late September to about 337,000 shares, leaving him with more than a million shares. Mr. Viniar and the other insiders received their shares after Goldman converted from a private partnership to a public company two years ago.
So far, the proceeds from Mr. Viniar's sales have amounted, day by day, to about $25 million. The shares he said he planned to sell this quarter would be worth another $8.4 million at yesterday's closing price of $84.
A spokeswoman for the firm said that the insider sales were part of an "ongoing" program of "orderly" sales. Last month, Mr. Viniar described his reasons for selling shares as personal and said company stock would continue to account for the bulk of his wealth after the sales.
"I have tremendous confidence in the firm," Mr. Viniar said, despite the gloomy short-term outlook he painted for Goldman and other investment banks when he discussed the firm's quarterly earnings last month.
At that time, the underwriter of initial public offerings and a top adviser on mergers, said the steep drop in sales of new stocks and the slowdown in merger activity combined to push its second-quarter earnings down 24 percent, to $577 million.
Mr. Viniar declined to discuss how he was dealing with the daily flow of so much cash into his personal accounts. Every day from the beginning of January through early May, he cashed out of shares worth $212,000 to $313,000. A similar pattern of sales was expected to begin again this month.
Other Goldman executives, including Leslie Tortora, who oversees the firm's information technology, and Robert J. Hurst, who is vice chairman, have made daily sales of several hundred to a few thousand shares this year. But neither Henry M. Paulson, the firm's chief executive, nor either of its co-presidents, John A. Thain and John L. Thornton, has been among them.
Among others registering their intention to sell shares was the Corzine Blind Trust, an investment fund being managed on behalf of Jon S. Corzine, the former chairman of Goldman who is now a senator representing New Jersey. The Corzine trust filed to sell 275,840 shares, making it the single-biggest seller on the list for this quarter. Those shares would be worth more than $23 million at yesterday's closing price.
Mr. Corzine said last month that he had sold about one-fourth of the 4.4 million Goldman shares he owned. He said he expected the managers of his blind trust to sell the rest of his shares the next couple of years.
Varying numbers of Goldman insiders have been filing to sell some of their shares each quarter since last fall. The current group is the smallest so far, down from more than 200 in previous quarters.
Goldman was scheduled to deliver another six million shares of stock to its employees this quarter as part of their compensation packages, Mr. Viniar said. To offset the issuance of those shares, the firm has been buying back its shares in the public market.
Mr. Viniar said the firm's plan to conduct the insider sales in an orderly way has been "working very well." Goldman's stock is down about 24 percent since the sales began in September, but brokerage stocks have been weak lately as the biggest Wall Street firms have reported falling earnings and a disappointing outlook for trading and underwriting of stocks and bonds this summer. |
