Ingram Exec Buys 1 Million of Firm’s Shares
Ingram Micro Inc., the No. 1 personal computer distributor, said Chairman and Chief Executive Jerre Stead bought 1 million shares of company stock, which he plans to keep for the “foreseeable future.”
Stead bought the stock using options, a first for the Santa Ana-based company’s CEO. Drawing from his own money, Stead bought the shares at $18 each on Thursday. He now owns 1.2 million shares of the company’s common stock, company officials said Monday.
The news of Stead’s purchase comes less than a week after the company said that fourth-quarter earnings will fall short of forecasts because of slowing sales. The company released the earnings estimates after the market’s close last Tuesday, but its stock still fell 20%, or $9.25 a share, in New York Stock Exchange trading. The following day, Ingram shares fell an additional 8.3%, closing at $33.94. The stock traded as high as $54.63 a share three months ago.
On Monday, Ingram’s shares rose 13 cents to close at $34.50.
“Stead has advised the company that he intends to hold the shares with no plans to sell in the foreseeable future,” Ingram said in a statement.
Stead became chairman and CEO in August 1996. At the time, the company agreed to grant him options to buy 3.695 million Ingram shares at the initial public offering price of $18.
After this month’s sale, Stead will retain options for nearly 2.7 million Ingram shares.
Analysts say Stead’s move on Monday is an effort to boost confidence in both the company’s stock and its future.
Under his employment agreement with Ingram, Stead gets no salary or bonus during the vesting period of his company stock options. But he and his wife do have lifetime health-care coverage.
In last week’s warning, Ingram said it expected profit of $73 million to $75 million, or 48 cents to 50 cents a share, in the quarter ending Jan. 2. Ingram had been expected to earn 56 cents, according to analysts surveyed by First Call Corp.
The company is scheduled to release fourth-quarter results Feb. 18. Ingram Micro earned $69 million, or 47 cents a share, in the year-earlier quarter.
The company cited slower sales of PCs to large corporate resellers, which rely on Ingram Micro as a backup provider of PCs. The resellers typically get machines directly from the PC maker and resell them to corporate users, with Ingram handling any extra tailoring to fit their needs.
