Victor: I have started to question the significance of insider selling of shares at companies such as CPQ. Hopefully you or someone else can provide an opinion. To quote one paragraph from the WSJ article you shared with us:
>Executives at Compaq Computer Corp., Apple Computer Inc. and Gateway Inc.
sold a total of $90 million of stock since the start of this year. The sales preceded
investor concerns about the PC market, and suggest to some analysts that PC stock
prices aren't likely to recover soon.
Yes, insider sales [and purchases] have traditionally been viewed as a key indicator of company insiders sentiment of how the company is doing and where the stock price is headed. Lately, however, I have started to wonder if we are placing too much emphasis on the importance of insider selling at some corporations, specifically those in the technology field where a major component of corporate officers compensation packages is stock options and where board members, too, have hefty stock options they can exercise on a yearly basis.
It would take some digging, but without having a listing of all CPQ insider sales over the past year or two, it is difficult for me to determine if the sales noted in this article follow a normal pattern of insider selling [all stock option related] and as such, have been taken out of context by the analysts who view the sales as evidence, "that PC stock prices aren't likely to recover soon."
In the current corporate environment, it is important to me to find out exactly who is selling shares and where the seller got his shares. Using a bank, First Union (FTU) as an example, I would be become uneasy if I saw that board members who do not have options to buy FTU shares were selling some of their FTU holdings whereas I would not be concerned if FTU board members who, as FTU employees who have stock options, sold some shares.
Thoughts?
Lynn
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