Selected Internet companies where insiders recently have sold or filed to sell shares:
Company No. of insiders No. of shares
Broadcom 12 2,300,000
Excite 10 752,790
Earthlink Network 7 575,885
CNET 5 505,728
Spyglass 4 180,920
RealNetworks 8 136,500
What gives? Internet stocks “are looking awfully pricey,” Disclosure's Mr. Columbus says. “There's a huge disconnect between the way these stocks are priced and the traditional tools of security analysis,” he adds.
Insider-data watchers said recent sales at Excite, Redwood City, Calif., were noteworthy. Between Sept. 1 and Oct. 30, nine insiders sold 450,000 shares at prices ranging from $3.74 to $42.55 each. Meanwhile, Mr. Bell indicated he plans to sell 200,000 shares, which would represent a reduction of 71% in his holdings of common stock and exercisable options, according to CDA/Investnet, a Rockville, Md., company that tracks insider transactions. Excite, whose stock is up more than threefold this year, declined to comment on the sales.
“Insiders in this industry have got to be wondering just exactly what the future will hold for this relatively young industry.”
— RICHARD CUNEO
Editor of Vickers Weekly Insider newsletter RealNetworks, which has also risen almost threefold this year, closed Tuesday at $36.75, down $1.75 on the Nasdaq Stock Market. Since September, seven company insiders have sold 125,765 shares. The Seattle company provides software that allows audio and video broadcasters to deliver their products over the Web in real time.
At Amazon.com, Director Tom Alberg indicated in U.S. Securities and Exchange Commission filings on Nov. 20 and Nov. 24 that he plans to sell 40,000 shares. The online retailer's shares, up more than sixfold so far this year, surged 9.1% Tuesday to $209.50 on Nasdaq.
In a secondary stock offering — a public sale of previously issued securities held by large investors — 10 insiders at Broadcom sold 1.3 million shares valued at about $89.1 million on Oct. 26, according to CDA/Investnet. Chairman, President and Chief Executive Henry Nicholas sold 490,000 shares, and co-chairman Henry Samueli sold 490,000 shares.
Mr. Nicholas said he sold the shares in the secondary offering to help increase the company's public float to about six million shares from three million. Through the secondary offering, the company hoped to increase the stock's liquidity, reduce volatility, and Mr. Nicholas hoped to diversify some of his holdings.
At Spyglass, Naperville, Ill., four insiders sold or indicated plans to sell 180,920 shares between Oct. 27 and Nov. 10. In filings from Nov. 2 to Nov. 9, President Douglas P. Colbeth indicated he plans to sell 80,000 shares at $13 to $14.93 each. Spyglass is up nearly fivefold since the beginning of the year. The stock closed up $1 at $24.50 on Nasdaq Tuesday.
At Earthlink, seven insiders indicated in SEC filings from Oct. 15 to Nov. 12 that they plan to sell 575,885 shares. George Soros, a major shareholder, indicated he plans to sell 145,704 Earthlink shares held by his company, Quantum Industrial Partners LDC. Earthlink CEO Charles Betty indicated he plans to sell 75,000 shares and Chairman Sky Dayton indicated he plans to sell 50,000 shares.
Earthlink shares, which are up nearly fivefold this year, rose $5.1875, or 8.5%, to close at $66 on Nasdaq. Earthlink, Pasadena, Calif., is an Internet access provider. A spokeswoman said the amounts involved represent only a small portion of the CEO's and chairman's holdings in the company.
At CNET Inc., San Francisco, five insiders indicated plans to sell 505,728 shares. That amount included 400,000 shares from Vulcan Ventures Inc., which is headed by Microsoft Corp. co-founder Paul Allen.
Shares of CNET, which provides content for the Internet, are up about 80% this year.
Internet insiders may be more willing to take profits now because of their stocks' incredible volatility, notes Richard Cuneo, editor of Vickers Weekly Insider newsletter. “Insiders in this industry have got to be wondering just exactly what the future will hold for this relatively young industry,” he says.
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