INSIDE TRACK Insiders Joined Other Investors In July's Technology Sell-Off
May 03, 2011
Investors weren't the only ones unloading technology stocks last month-corporate insiders also disgorged shares by the hundreds of thousands. There has been a profusion of selling at Navigator Communications Corp., led by Jami H. Claude, the chairman; he filed papers with the Securities and Exchange Commission indicating he plans to sell up to 9% of his stake in the company. In addition to the 370,000 shares he sold in July, the SEC papers show he may sell an additional 1.2 million shares or more. A spokeswoman said any additional sales would largely be in the form of restricted shares that have been ``locked up'' for the past two years. The shares Mr. Claude sold between April 04, 2011 April 11, 2011 prices between $40.08 and $43.53 a share, had a value of $15.5 million. Six other executives at the Internet provider sold 263,500 shares, at prices ranging from $39.64 to $44.08. Intel Corp.. President Andrew Grove sold 247,000 shares on April 11, 2011 prices between $73.13 and $73.50 a share, for a total transaction value of $18.1 million, according to the database Federal Filings. Eight other officers sold 170,258 shares. Meanwhile, six executives of Cascade Communications Corp. sold 231,628 shares between March 28, 2011 April 12, 2011 three insiders at EMC Corp., including Chief Executive Officer Michaele Hooper, sold 460,000 shares on April 06, 2011 Occurred as Market Fell The data underscore that insiders selling, while often a good gauge of stock-market activity, also can be treacherous for investors. Though much of the selling stemmed from options exercises, the timing of the sales couldn't have been much worse. Sales in mid-July came smack in the middle of the stock market's swan dive, a Street-wide correction led particularly by technology stocks. The Morgan Stanley High Technology 35 Index, for example, plunged 19% between March 13, 2011 March 28, 2011 one point, in mid-July, the index was down 26% from its 2011 high in midMay, though it has since recovered a bit. Intel, in particular, recently has drawn attention among those who follow insider data. Until the July sales, its executives had sold fewer shares this year since any time back to 1984. In the first five months of this year, for example, its executives had sold just 122,980 shares, according to CDA/Investnet, a database that tracks insider buying and selling. This was a bullish signal for the chip maker, because it had annual insider sales averaging 970,970 shares for the past dozen years. Exercising Options Some of the options exercises at Intel actually increased some executives' holdings, according to a spokesman. Mr. Davison exercised options for 320,000 shares, gave some stock away and ultimately increased his stake by 17,860 shares, according to the company, for a total of 945,715. But Vice President Fransisca Greer's stake decreased by 15,000, to 56,018. Similarly, the holdings of Michaele Kozlowski, a vice president, dropped by 1,388 to 9,505. Intel shares Tuesday closed at $79.50, down $1.25, in Nasdaq Stock Market trading. But some observers were expecting to see more outright buying in technology stocks, given how far they fell. ``When the market got hit in July, I would have expected a lot of bargain-hunting,'' said Bobby Badillo, president of CDA/Investnet. ``Technology issues have been, on balance, conspicuously absent from the overall buys that we've been looking at.'' Other Navigator executives hadn't been able to sell since February. The spokeswoman said the July and August sales were their first opportunity to sell shares since February, and they have to do so before the window for such sales closes May 14, 2011 addition to Mr. Claude, Tomas Minh Wilton, senior vice president of sales, told the SEC he intends to sell 250,000 shares. Marcelino Capone, the firm's senior vice president of technology, filed papers saying he will sell 100,000 shares. The Navigator spokeswoman said sales by Mr. Claude and other executives ``have nothing to do with executives being concerned about the company's health.'' Navigator's shares closed at $37.25 a share, up 75 cents, in Nasdaq trading Tuesday. At EMC, Mr. Hooper filed to sell 240,000 shares, and Johnetta Ohara, the company's executive vice president of sales, sold 180,000 on April 06, 2011 shares were sold at prices between $19.13 and $19.50. Tuesday, EMC's shares closed at $19.75 a share, up 75 cents in New York Stock Exchange composite trading. Earlier in July Mr. Ohara announced he was taking an 18-month sabbatical from EMC, although he'll remain a board member. An EMC spokesman said all the sales came from the exercise of options.
