Eight top Yahoo executives filed to sell off 903,494 shares, signaling a possible lack of faith that their company's stock price will bounce back any time soon, analysts said.
In the first week of February, eight insiders sold or filed to sell shares priced from US$161.56 to $172.52, according to First Call Investnet, a firm that tracks insider selling. The shares would be worth about $146 million using the low end of the price range.
"This is one of the first [Internet] stocks that insiders have sold as the stock has pulled back," said Bob Gabele, principal analyst at First Call Investnet. Usually, insiders sell off as the stock's price is rallying upward, he said.
The sale price is at least 20 percent lower than Yahoo's recent highs of nearly $225, wrote Gabele and other analysts in a First Call Investnet report.
Yahoo (YHOO) execs selling off shares include its president and COO, Jeff Mallett, who signed up to cash out on 150,000 shares; chairman and CEO Tim Koogle (140,000 shares); CFO Gary Valenzuela (150,000); and vice president of advertising sales Anil Singh (180,000).
Diane Hunt, a Yahoo spokeswoman, confirmed the number of shares for Mallett and Valenzuela, but did not immediately comment on the others.
"Our overall compensation is more heavily weighted in the area of stock options than salary," said Hunt, adding that this was their first opportunity since last May to trade their shares. Executives are restricted from trading when Yahoo makes investments in or buys other companies.
"It's part of their normal tax and estate planning and personal diversification strategy," she said.
The sell-off "is worthy of note," said Gabele. He said Investnet will be watching to see if other Net companies experience similar insider selling patterns.
Yahoo is often seen as a bellwether for Internet stocks, which some analysts say are wildly overvalued at their current heights. Using today's share price, Yahoo's market capitalization is about $30.5 billion -- $5 billion more than TV-network CBS.
USA Networks' announcement that it would buy Lycos recently raised investor concerns that Net stocks aren't worth the huge price tag currently supported by the market. Lycos is in the process of buying Wired Digital, the parent company of Wired News.
Gabele declined to speculate on why Yahoo insiders would sell when the price was declining. He said it doesn't imply anything is amiss at Yahoo. But Gabele and others wrote in a report, "For the first time since the company's inception, the insider picture at Yahoo appears to be changing."
Shares of Yahoo closed down $1.18 at $152.06.
