Techs Keep Selling, Selling, Selling
By Craig Stanley (cstanley@stockhouse.com)
Friday, April 6
Judging by the level of insider selling at Dell [DELL], Sycamore
Networks [SCMR] and PMC-Sierra [PMCS], the tech market bottom
may not be as close as investors hope. Executives have been
stepping up their selling recently, which could suggest they're not
very optimistic about their companies' future prospects.
Dell Computer Corporation
On March 29, senior VP Joseph Marengi filed documents with
the Securities and Exchange Commission (SEC) to sell
130,000 shares. Michael Lambert, senior VP of Dell's
enterprise systems group, announced on March 26 his
intentions to sell 100,000 shares. President and COO Kevin
Rollins said he would be selling 550,00 shares, setting March
23 as the potential date. And director Morton Topfer filed to sell
550,000 shares on March 21, with an additional 500,000
shares on both March 19 and March 6.
On Thursday, the PC maker helped buoy stock markets by
announcing it still expects to meet its latest fiscal first-quarter
projections of about $8 billion in revenue and earnings of
$0.17 a share.
Sycamore Networks Inc.
Mustang Ventures, a venture fund affiliated with Germany's
Siemens [SI], registered 3-million shares of Sycamore
Networks for sale on March 20.
On April 5, the Chelmsford, Massachusetts-based maker of
data networking gear became the latest tech firm to warn of
slowing growth. The company said it expects to post a
third-quarter loss of $38-to-$45-million, or $0.16-to-$0.19 a
share on revenue of $50-to-$60-million. Analysts polled by First
Call were expecting $152 million in sales and a profit of $0.05
a share. Sycamore also said it is cutting 140 jobs, and it will
offer financial guidance when the third quarter report is
released in May.
PMC-Sierra Inc.
Robert Bailey, chairman, president and CEO of PMC-Sierra,
has filed paperwork for the potential sale of 250,000 shares on
March 28. Chief operating officer Gregory Aasen was planning
to sell 100,000 shares of the Burnaby, British Columbia-based
maker of communication chips on the same day.
PMC-Sierra's shares have fallen on troubled times recently.
Since peaking at more than $100 in January, the stock has
plotted a course due south, closing at $19.87 Friday. On
September 1, the share price set a 52-week high of $246.25. A
recent StockHouse report detailed the problems facing the
firm.
Verity Inc.
Verity became a rarity in the tech sector when it reported a
better-than-expected profit on March 14. The company said
net income for the fiscal third quarter came in at $9.2 million,
or $0.25 a share, compared with $7.8 million during the same
quarter last year. Analysts polled by First Call had forecast
earnings of $0.23 a share. The maker of software for business
portals is predicting fourth-quarter revenue of
$41-to-$42.5-million and earnings of $0.24-to-$0.27 per share,
in line with analysts' expectations.
But these strong results haven't stopped insiders at Verity from
selling. Chairman and CEO Gary Sbona announced his
intentions to sell 75,000 shares on March 23 and an additional
100,000 shares on March 27. Anthony Bettencourt, Verity's
president, planned to sell 25,000 and 38,563 shares on March
20 and 26 respectively. And insider Todd Yamami filed to sell
32,000 shares on March 20.
Starbucks Corp. [SBUX]
Even coffee retailer Starbucks hasn't been immune to insider
selling. Chairman Howard Schultz filed to sell 414,041 shares
on March 22, 275,000 shares on March 23 and a further
325,00 shares on March 27.
Starbucks announced on April 5 that total revenue for the
five-week period ending April 1 was $252 million, up 23% from
last year, with same-store sales edging 5% higher.
Insider trading activity is obtained from forms filed with the Securities
and Exchange Commission. Verification of proposed purchases and
sales, if and when they occur, appear in subsequent filings.
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