Tuesday, September 08, 2009

Business Insider: Insiders Treat Yahoo "Like It's Their Personal ATM" (YHOO)

[Note from Eric: This article came out today in Business Insider. Both it and an earlier post from Henry Blodget refer to an analysis done by The Guardian on Carol Bartz cashing out $2m in stock between Feb. 1 and June 30th of this year. That analysis was actually done by me last week. The original study was posted here. I'm glad the analysis is getting some well-deserved attention. Contrary to some reports, I don't own any YHOO shares. I sold my entire stake about a year ago, after being disappointed with the Board's defense of its handling of the MSFT negotiations at the August 2008 shareholders' meeting. I'll be providing a detailed opinion piece on my study of YHOO insiders cashing out in tomorrow's TheStreet.com.]

Nicholas Carlson|Sep. 8, 2009, 1:25 PM|comment5

Tags: Online, Yahoo!, Big Tech, SEC Stalker

Following reports that new CEO Carol Bartz has already sold $2 million worth of Yahoo shares, Ironfire Capital hedge fund

manager Eric Jackson compiled a list of Yahoo (YHOO) insider stock purchases and stock sales over the last two years.

He calls the list "a case study in compensation excesses."

See the insiders who Eric says treat Yahoo "like it’s their personal ATM." →

Eric will publish his full reaction on TheStreet.com tomorrow. But here's a preview of his findings:

  • Insiders have bought $67 million in Yahoo! stock in the past two years. However, of this amount, the vast majority was bought by Carl Icahn for his hedge fund*, which he has already sold (and more -- $189 million) in the last 2 weeks. A small amount of stock was purchased by Michael Murray, Yahoo!’s chief accounting officer who announced last week that he’s leaving the company. Not including Icahn’s and Murray’s stock purchases, Yahoo! insiders have collectively bought only $103,700 in stock in the past two years.
  • Over the same period, Yahoo! insiders have cashed out $233 million in stock.
  • In those 2 years, Yahoo! insiders have also seen zero strike price options vest which they have yet to sell in the open market but which have a current market value of another $58 million.
  • Therefore, for every dollar of stock purchased by a Yahoo! insider in the last year, they sold stock or received options worth $2,159.

See the insiders who Eric says treat Yahoo "like it’s their personal ATM." →

Note: Eric only tracked Carl Icahn's purchases and sales since he's been a Yahoo board member and the company has had to disclose his transcations to the SEC. Prior to joining the board, Carl acquired tens of millions of dollars worth of Yahoo shares. Of course, all this only re-emphasizes Eric's point that Yahoo insiders sell more shares than they buy.

Yahoo! (YHOO) Executive & Director Insider Stock Purchases and Stock Sales in the Last 2 Years

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