<<This whole thing does show us though that even DELL can be caught off guard and not be able to "warn" in a timely manner.>>
Well, they warned themselves! Michael Dell is that kind of slickster who makes Slick Willie look like an honest gentleman.
February 17, 1999
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Inside Track
Dell Computer Executives in January
Sold $116 Million of Company's Shares
By DANIELLE SESSA
Staff Reporter of THE WALL STREET JOURNAL
Executives at Dell Computer Corp. sold more than 1.5 million shares in January, totaling over $116 million, with two officials substantially cutting their stakes in the computer maker.
The most recent round of selling follows a larger period of insider activity last autumn, where 16 insiders sold a total of more than 13 million shares. To be sure, many executives at technology companies receive stock options as a form of compensation. But during this most recent bout of activity, some executives significantly slashed their holdings, including the firm's chief accounting officer and a Dell director.
"Over the years, we have become accustomed to a steady level of insider selling from Dell insiders," said Bob Gabele, director of research at First Call Investnet, a Rockville, Md., company that tracks insider buying and selling. "In the past two quarters, however, we have begun to see an increase in the number of insiders reducing their holdings by a significant margin.
See lists of the biggest individual insider trades of the past week and a rundown of companies with the largest net change in insider ownership.
The insider sales preceded Dell's earnings announcement Tuesday and two reports issued Friday that expressed concern over sales. In heavy trading Friday, shares of Dell tumbled nearly 12% after analysts from BancBoston Robertson Stephens and Salomon Smith Barney each issued reports warning of a slowdown in the company's sales growth rate in the fourth quarter.
Dell's fourth-quarter earnings, released after the markets closed Tuesday, came in at 31 cents a diluted share, meeting a First Call consensus of analysts' expectations. Shares of the Round Rock, Texas, company fell $1.125 to $88.75 Tuesday in composite trading on the Nasdaq Stock Market. In after-hours trading, Dell shares dropped to $77.
"It's a strong company," said Alex Mou, one of the analysts who issued the BancBoston report. "We are not saying that the long-term prospects have vanished but that this quarter will not be as strong as most people think."
Mr. Mou believes the insider sales support his contention of a slowdown at Dell. "We think it's just another sign of the company reaching its peak growth," he said of the insider activity.
For its part, Dell said the trades were executed during a limited opening in the trading window for executives. T.R. Reid, a Dell spokesman, said the sales by the executives represented a "extraordinarily small part of their holdings."
Leading the insider selling was Chairman and Chief Executive Officer Michael S. Dell, who sold 648,000 shares at $76.60 to $78.69 apiece. Mr. Dell holds so many shares -- well over 200 million -- that his sale is relatively insignificant, said Mr. Gabele of First Call Investnet.
Director Klaus Luft disposed of 403,200 shares at $73.38 to $74.38, his first sale in four years, according to the company. The sale reduced his actionable position -- common stock and exercisable options -- by 70%, according to First Call Investnet.
Thomas Green, a Dell vice president, sold 102,400 shares at $75.06. Chief Financial Officer Thomas Meredith sold 100,000 shares at $73.88 to $78.13. Chief Accounting Officer James Schneider sold 61,000 shares at $74.38 to $79.81. Mr. Schneider has sold a total of 241,000 shares since September, reducing his actionable position by 28%.
Rounding out the selling was vice president Paul Bell, who sold 68,680 shares at $73.63 to $74.13; vice president Alex Smith, who sold 67,200 shares at $74.06 to $74.38; vice president Rosendo Parra, who sold 32,223 shares at $78 to $78.13; director Paul Hirbschbiel, who sold 25,000 shares at $74.38; and vice president Keith Maxwell, who sold 16,142 shares at $79.81 to $79.88.
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