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Its not "so called" it is called insider sales. No matter who it is.

No, it's not. The URLs you provided lead to lists of Form 144 filings. Form 144 must be filed prior to two types of sales: [1] the sale of restricted securities by anyone; or, [2] the sale of any securities by an affiliate of the issuer.

"Insider" status is governed by Section 16(a) of the Exchange Act, which defines insiders as officers, directors, and beneficial owners of more than ten percent of any class of equity security registered under section 12 of the Act. Anyone who becomes an officer, director, or beneficial owner must notify the SEC of this status via a Rule 16(a) filing on Form 3.

With some exceptions too detailed to get into here, an insider who wishes to sell (or otherwise transfer) a covered security must file a Form 144, just like anyone else, prior to the time of the sale.

After the sale, an insider, (but not necessarily any person covered under Rule 144), must also file a Rule 16(a) notice using Form 4, letting the SEC know that the transaction has in fact taken place.


What is your source for pre-IPO investors?

I followed the link you listed, and clicked on the names of the persons/entities who had filed the Form 144s. The large majority of them look something like this:

Planned Sale Detail
Title: Unknown

Obviously, this is a distribution from some type of venture capital partnership.

After quite a bit of clicking, I did manage to find this insider:

Planned Sale Detail
Title: Chief Executive Officer

Mr. Smith had filed on June 28 to sell 500,000 shares.


And why bold option? They have planned to sell.

Planned yes, but you can't tell from a Form 144 whether the sale was carried out or not.


Also if they are moving 'some' (presumption?) of their capital elsewhere, should the ordinary investor ignore it?

Yes. Even assuming for the sake of discussion that they are moving all of their capital elsewhere, (a rather larger presumption), the average investor, having performed adequate DD, should ignore it.

If you are a trader, rather than an investor, you should still ignore it if this is all the information you have.

As far as venture capitalist sales go, that's just what they do. VCs buy into private companies, hold the stock until it goes public and then, when the statutory holding periods have expired and the stock is up nicely, they sell out and go looking for the next private startup to invest in.

As to the true insider sales, take the example of Mr. Smith, above. He filed to sell 500,000 shares for $59,000,000. Other than the fact that Mr. Smith is a fairly wealthy individual, this information tells us very little, because we still don't know for sure that he sold the shares, (only that he intended to at a certain point in time). In addition, we don't know what % of Mr. Smith's holdings in SCMR are represented by the 500,000 shares, nor do we know what % of the total company are represented by those 500,000 shares.

We can get a clue as to whether Mr. Smith really sold by looking at the completed transactions pages, which can be found at:

for Sycamore, and at:

for Juniper.

We can see that Mr. Smith in fact sold 1,000,000 shares of SCMR on June 30, 2000. This shows us two things. First, Mr. Smith is really, really rich. Second, we must have missed a Form 144.

In any event, we now know that Mr. Smith sold not just 500,000 shares, but twice that many. I guess it's really time to panic, no? Wait, let's see if Smith is divesting himself of his own company, or if he's just looking to diversify a bit.

According to SCMR's March 14, 2000 Prospectus, Mr. Smith, at that time, directly owned 44,109,549 shares, or 18.7 of the entire company. In addition, the fifteen officers and directors, as a group, owned 197,383,731 shares. For comparison purposes, the total number of shares offered to the public during that offering was 10.1 million shares. So, considering that Smith owned 44 million shares and controlled another 13 million or so, we see that this sale, while astronomical by my standards, is a mere drop in Smith's financial bucket.

Similarly, as of the date of the prospectus, there were a total of 244,523,253 shares of SCMR outstanding. Not much of a selloff. On the other hand, given that only 10 million shares were sold to the public, the sudden arrival of another million shares onto the market would worry me if I were a short term investor or day trader.

But, since I intend to hold my SCMR shares for at least 5 years, I don't really care. Mr. Smith has already made quite a bit of money for me. I shan't begrudge him if he takes a little profit for himself.

I apologize for the rather snide tone of my first post on this subject. Normally I try to keep my obnoxious personality hidden when posting, but I was in a hurry and didn't have time to edit.



Voluntary disclosure: Long SCMR, JNPR, CSCO, JDSU, ORCL, QCOM, SUNW, & might be long AVCI & CORV if I can get past my valuation worries...

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