Did you ever get the feeling Bloomberg doesn't like AMAT? Morgan sells a ton of stock. Here is the Bloomberg story. Jeff
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Applied Materials CEO Files to Sell Shares: Insider Focus
Santa Clara, California, April 21 (Bloomberg) -- Applied Materials Inc. Chief Executive Jim Morgan filed to sell 288,000 shares of the No. 1 chip-equipment maker this month, joining other insiders who sold recently as the stock climbed to records.
Morgan, 60, planned to complete the biggest sale of Applied stock by any one insider in almost three years on April 7, according to the Washington Service, which tracks insider buying and selling. If Morgan sold the shares at their closing price that day, his proceeds would've been $18.6 million.
Optimism for a quick industry recovery helped lift Applied shares threefold in four months, culminating with a high of 68 11/16 on Feb. 19. The rise came after a steep drop in sales of semiconductor equipment to companies like Intel Corp. pushed Applied stock to its lowest point in almost two years in October.
Applied insiders ''seem to be fairly adept at finding good places to sell,'' said David Coleman at Washington, D.C.-based Insider Watershed Group LP, a hedge-fund manager whose investment decisions are based on insider buying and selling.
Investors often watch insider buying or selling for clues about how executives and directors expect the company to fare.
Eight other executives and directors, including President Dan Maydan, sold 519,631 shares from January to March for a total of $34.3 million. Senior Vice President Sasson Somekh also filed to sell 100,000 shares on April 9.
Applied shares rose 4 5/8 to 61 3/8.
Options Related
If completed, Morgan's share sale will be the biggest by an Applied insider since October 1996, when former Vice Chairman Jim Bagley sold 374,172 shares. Morgan must report his April sales to the U.S. Securities and Exchange Commission by May 10.
Many insiders also sold in 1997 -- a year when Applied stock rose 68 percent -- though selling tapered off in 1998 as sales and profit at the company began to slide. In the last six months of last year, insiders sold a total of only 62,795 shares, and Morgan didn't sell any.
Selling picked up along with the stock price. Maydan sold 165,331 shares in two lots on Feb. 19, the day Applied rose to its all-time high, at $67.48 and $67.67, after exercising options at $10.50 a share. He pocketed $9.43 million from the sales.
Most of the recent sales were options-related. Stock options give their holders the right to buy or sell a stock at fixed prices over a set period of time.
Options often are used as compensation for executives at technology companies, which prefer to spend their cash on research and development. Morgan, for example, as of Nov. 1 held options to buy 576,000 shares and was granted 80,000 more on top of his $1.02 million in salary, bonus and other compensation in fiscal 1998.
Executives and directors have a limited time in which to exercise stock options after the company reports its quarterly earnings, Applied spokesman Jeff Lettes said.
''These sales are a normal occurrence,'' he said.
Other Insiders
David Wang, senior vice president of worldwide business operations, pocketed $8.74 million after selling 150,000 shares. He exercised options at $8.88 a share and sold the stock at $66.50 to $68 on Feb. 19.
Wang also sold 30,000 shares on Jan. 8 in an options-related sale, bringing profit of $1.35 million.
Joe Bronson, another senior vice president, sold 45,000 shares in an options-related transaction on Feb. 19, raking in $2.49 million. Chief Accounting Officer Mike O'Farrell sold 26,000 shares on Mar. 15 after exercising options, bringing profit of $1.16 million.
Two company directors, Mike Armacost and Tsuyoshi Kawanishi, sold 33,700 shares after exercising options in February and March. Armacost, who also is president of the Brookings Institution, made about $765,000, while Kawanishi, a senior advisor with Toshiba Corp., pocketed $1.07 million.
Board member Philip Gerdine, an executive director at Siemens AG, sold 49,600 shares for $3.34 million, also on Feb. 19. Director Al Stein, chairman and chief executive of VLSI Technology Inc., sold 20,000 shares for $1.39 million on the same day.
Apr/21/1999 17:50
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