Monday, September 14, 2009
Does Yahoo Inc.’s top lawyer know something about the company’s future that investors don’t? General counsel Michael Callahan has sold more than $2 million in company stock over the last two years, and investors are asking why.
Callahan isn’t the only top executive at Yahoo cashing in. Others, including CEO Carol Bartz, have sold more than $232 million in stock in the past two years as the Internet search engine struggled to compete against rivals Google and Microsoft Corp. Bartz alone has sold $2 million in stocks since becoming CEO nine months ago. Yahoo executives declined to comment, a company spokesperson said.
“It shows a lack of confidence,” says Eric Jackson of Naples, Fla.-based Ironfire Capital LLC, an outspoken former shareholder. “If you think the stock is about to go up, why would you sell shares?”
Jackson reviewed the company’s regulatory filings recently and posted a spreadsheet of executives’ stock sales online. He says he also sent his findings to other investors, who were disappointed to see so much cash leave the company, even though executives have the right to sell the options they’ve been given.
“For shareholders, it’s always a bad sign when you see insiders selling shares,” Jackson says. Jackson is quick to point out that Callahan started selling stocks on Feb. 1, 2008, the day after Microsoft offered $31 a share to buy Yahoo. These days, the company’s stock sells for around $14 a share.
The stock selloffs occurred as lawyers and other executives left the company. Associate general counsel Duane Valz joined the law firm Chadbourne & Park this month to help the firm open its first office in northern California. Yahoo’s former head of IP, Joseph Siino, left in late 2008, and the head of patent litigation, Lisa McFall, soon followed.
Before joining Yahoo, Callahan was with the law firm Skadden, Arps, Slate, Meagher & Flom LLP — then later worked for Electronics for Imaging, Inc. as corporate counsel. He joined Yahoo in 1999 and was named general counsel in 2003.Sphere: Related Content