AST Co-Founders Make Millions on Sales of Their Stock

As AST Research Inc.’s stock has soared during the past year, the company’s co-founders, Safi Qureshey and Thomas Yuen, have each sold sizable chunks of stock in the company, reaping millions of dollars in profits.

Qureshey and Yuen together made at least $7 million in the largest sales of their shares of AST common stock since the company went public in 1984, according to documents filed with the Securities and Exchange Commission.

The company and industry analysts say that the executives are not expressing a lack of confidence in the company’s future. Rather, they say the co-founders are reaping the financial rewards for their hard work over the past decade.

During 1990, Qureshey, co-chairman and chief executive of AST, sold 263,180 shares of AST common stock, or 13.7% of his total holdings, according to SEC filings. For the stock sales where prices are available, about half of the total amount sold, Qureshey made $2.4 million.

Yuen, co-chairman and chief operating officer, also sold a significant amount. During the year, Yuen sold 256,210 shares of stock, or 13.3% of his total holdings. For the stock sales where prices are available, about 70% of the total amount sold, Yuen made $3.9 million. Some of the stock that he has sold was held in trust for his family.

In early February, Yuen filed to sell 150,000 additional shares, and Qureshey filed to sell 40,000 shares more.

The stock sales came during a year of enormous success for the 10-year-old manufacturer of personal computers. Despite an economic slowdown that hurt other computer companies, the company reported record earnings that surpassed Wall Street analysts’ expectations throughout the year, and its stock price soared 259% during the year.

A spokesman for AST said the stock sales were routine actions for executives in large companies. He said they remain committed to the company and retain large chunks of the stock in the company.

Steve DeLuca, analyst for Cruttenden & Co. in Newport Beach, said he believed the stock sales were noteworthy but not indicative of any change in the founders’ confidence in the company.

“I think it’s significant, but it’s wise for them to sell,” he said. “It would increase your faith in the company if they didn’t sell but you don’t like to see them putting everything in it.

“I don’t think you can read anything into it,” he added. “They’re not cashing out totally, but they’re taking their rewards for something they’ve worked hard for. They’re doing exactly what a shareholder should do.”

Bob Gabele, president of Invest/Net Group Inc. in Fort Lauderdale and publisher of the Insider Trader’s Monitor, noted that 1990 was the first year Yuen sold any stock and the first time both founders began taking large profits.

“Nervous investors could lighten up and take profits, but I don’t think clearing out is in order based on this activity,” he said. “They’re basically lightening up on their holdings.”

After a 2-for-1 stock split effective Jan. 31, Qureshey still held 13.8% of AST’s 28 million shares of common stock outstanding, down from 16.94% on June 30, 1989. Yuen holds 11.1% of stock, down from 16.8% on June 30, 1989.

Albert Wong, a co-founder of AST Research who left the company in 1988, also sold a big share of his stock during 1990. Wong, who now runs his own computer add-on components company in Irvine, sold 409,000 shares of stock for $5.6 million during 1990.