cda.com
INT'L BUSINESS MACHINES CORP. - IBM -- IBM's stock has certainly been a high-flyer in this latest tech rally. Over the past twelve months, shares of IBM have jumped more than 50%. Naturally, profit taking by insiders might be expected, but there's more here than meets the eye. Insider activity in '98 has marked a dramatic shift in the profile of insiders at IBM. Remember, when the issue bottomed out at $21 per share in '93, company officials, across the board, began acquiring stock. Chairman Louis Gerstner led the charge, and his followers continued this strong accumulation until '96. That year marked a subtle change in behavior, as insiders began to return stock to the company as a means of taking profits. Now, in '98, for the first time in the Gerstner era, IBM insiders have begun a pattern of aggressively selling stock outright on the open market. The selling pace has now surpassed all annual distribution levels since '83. Just as he had in '93-'94, when insider buys seemed to cry "bottom", Chairman Gerstner once more appears to be setting the tone for the entire profile of IBM insiders. In summary, from October 22 to October 29, seven insiders sold a total of 383,687 option-related shares at prices ranging from $140.10 to $148.56 each. Chairman Louis Gerstner disposed of 142,000 shares via options exercises (options set to expire in 2003) and open market sales. This sale comes after Mr. Gerstner's May sale of 276,000 shares at $125 each. Next, VP Lawrence Ricciardi sold 73,417 shares via options exercises and open market sales. VP Nicholas Donofrio disposed of 67,772 shares. Mr. Donofrio exercised several series of options not set to expire until 2002. VP J Thomas Bouchard exercised options for and sold 55,578 shares, having sold stock in April at $115 each. Mr. Bouchard exercised a series of options that are not set to expire until 2005. VP Samuel Palmisano sold 20,526 shares, while VP Bruce Harreld disposed of 17,653 shares. Lastly, VP Daniel O'Donnell dropped 4,011 shares. It is also worthwhile to mention that many of these insiders reduced their actionable holdings (common stock and exercisable options) in this round of selling by 20%. IBM develops, manufactures and sells advanced technology processing products, including computers and microelectronic technology, software, networking systems and information technology-related services. |
