Google Execs to Sell Shares
Google Inc. co-founders Larry Page and Sergey Brin each plan to sell as many as 7.2 million company shares during the next 18 months -- divestitures that would generate windfalls of more than $1 billion apiece at current market prices.
The online search engine leader disclosed the intentions of Page and Brin, both 31, late Friday in documents filed with the Securities and Exchange Commission.
In the same filing, Mountain View, Calif.-based Google also revealed that its chief executive, Eric Schmidt, planned to sell 2.2 million shares of his holdings to cash in on the company’s stock price, which has nearly doubled since an August initial public offering.
Google’s shares gained $1.86 to close at $169.40 Friday in Nasdaq trading. Based on that price, Page and Brin would each pocket $1.2 billion from their planned stock sales, and Schmidt, 49, would collect $373 million. The stock’s trading price has ranged from $95.96 to $201.60 a share since the IPO was completed Aug. 19 at $85 a share.
Page, Brin and Schmidt, who say they run Google collectively, will retain most of their company stock. If the planned sales are completed, Page and Brin would still own about 31 million shares apiece -- stakes worth more than $5 billion as of Friday. Schmidt would still own 12.2 million shares -- currently worth more than $2 billion.
Page, Brin and Schmidt plan to dispose of their stock through automated trading programs -- a common tactic that corporate executives use so investors don’t question the timing of their divestitures. The trio adopted the plans in mid-September, but Google didn’t reveal the details until Friday.
Google disclosed the planned stock sales amid rising investor anxiety about a possible sharp decline in the share price if hundreds of insiders begin to cash out the holdings that they have accumulated since the popular search engine’s Internet debut in 1998.
The selling restrictions on 39.1 million shares held by Google insiders were lifted Tuesday, contributing to a one-day decline of nearly 7% in the company’s stock. An additional 227 million shares will become eligible for trading from Dec. 16 to Feb. 14.
The insider selling has already begun. In a separate SEC filing Friday, venture capital firm Kleiner Perkins Caufield & Byers disclosed that it sold 5.78 million shares Wednesday for $997 million, or $172.45 a share. Menlo Park, Calif.-based Kleiner Perkins had invested $12.5 million in Google in June 1999.
Google also raised investor worries this week by warning that its recent rapid rate of revenue growth might not continue this quarter.
