The chairman of Google is selling his shares…should we be worried?
Ever since the Enron scandal broke in 2001, stockholders sit up and take notice when a high-ranking official of a large company sells a huge amount of shares. These officials know more about their company and its projected future than most people do, and if they’re selling off millions or billions of dollars worth of their shares in their company, stockholders want to know why.
It was announced recently that Google Inc., Chairman Eric Schmidt plans to sell $2.51 billion of his stock in the company, which translates to about 3.2 million shares of his Class A stock. This is on top of the 1.8 million shares he sold in 2012 and the 300,000 shares he sold in 2011.
Of course, just because chairmen or CEOs of large companies sell significant amounts of shares in their companies, that does not mean that their companies are involved in any wrongdoing that is soon to be exposed, as was the case with Enron. It’s possible that they believe the value of the company’s stock is close to maxing out and just want to get out while the getting is good. Or they might have other reasons for their actions. But Market Watch is reporting that CEOs and CFOs at a number of large companies are selling their stock “at an alarming pace.”
Who gets hurt when companies lose a significant portion of their value? The average stockholder, that’s who! People can’t get a decent return on their investment in other areas, so they choose the stock market. But they don’t have inside information about these companies that CEOs do, and so they’re left holding the bag when the company starts to tank while company officials who sold their stock are sitting pretty.
In other words, the rich folks get the gold mine and the common man gets the shaft.
You can read more about the Google story here.
Why do you suppose the chairman of Google, as well as high-ranking officials at a number of other companies, are selling so much of their stock in their companies? Do you think they’re concerned about the future of their companies in particular, or do you believe they’re sensing an overall market crash in the near future?
How about you? Are you uneasy about your investments due to the state of the economy or the direction the country is heading? Let me know what’s on your mind about these issues.
Not sure how to take it. What about 401k can’t take them out
My guess would be that these ‘high rollers’ see the handwriting on the wall. Government intervention on the internet can mean only one thing. A good thing is going the way of the doo-doo bird so get out while the getting is good. Government will screw the internet up just like it has the national education system, the economy, and anything else it has put its hands on. To me, it’s that simple. Besides, they never back off when they are wrong so there is no room for compromise that they seem to foster on the rest of us. Compromise your principles so we can ‘all get along’. Yeah, right and I’m going to repay you that loan you gave me.
I think the obvious answer to why they’re selling stocks is to take their money and invest in Gold, Silver, or something else that will retain or grow in value. The US Dollar is on life support and will likely expire soon. It is wise to take whatever savings we have and invest it in something else ASAP.
For an average person- with average ways and means..how does one sell a house and move? Sell and rent or sell and buy ASAP? Hate to have dollars in hand and all tanks! Is tangible asset the key word here?
The effect of his selling is evident in a weekly chart: GOOGL. Selling at that point, a mature long term high, makes sense. Sitting on a forty week average a significant drop on heavy volume might warrant attention, as well as a point & figure chart sell signal. The stock could rebound from its 40 week average too, watch volume.
The time is short my friends. Convert to gold, silver, gems, food, water and ammo. We are past the tipping point. Over 17 1/2 trillion in debt with over 80 trillion in unsecured liabilities. You’d better not be living in any cities over 1000 population. Waaaaay off the grid is the best. When it happens it will be quick and cause monsterous
For the past several years I have advised relatives and friends who own stock to take some part of that and invest in metals, food, and other things one would need REGARDLESS of what happens. I do NOT believe in having all one’s eggs in one basket; anymore the stock market is one big “basket” that the bottom could fall out of, spilling all the eggs.
Most have ignored my suggestions – even refusing to come to sites like this to read up and get educated, but at least I’ve tried.
People are dumping stock all over the U.S., the DOLLAR is gone. It’s all part of the plan, to destroy the U.S.. When the Dollar is done, we are done, then the one world currency takes over. We are all ready past the point of no return. The U.S. owes more than it can ever pay back. I watched a guy on the news say, if U play with stock, stop and get out. Everybody better stock up on EVERYTHING!!! Makes U wonder why Home Land Security is stock piling the things they are. They may be thinking like a lot of us are thinking. The LORD put a head on your shoulders, USE IT. Have a smart day!!
I tell folks this all the time and they brush me off.
You mentioned the Lord “putting a head on your shoulders”. Yes, God gave us brains to think with and to be prudent. Shame more folks don’t use theirs and take notice of what’s happening around them!!
I listened to the podcast. Some interesting advice, I think the stop-loss protection is probably the biggest kernel to get out of it. However in the event of a total collapse, converting those proceeds into something tangible will be the big trick… It is now almost the new year, no wavering in the marking (right now) so running around wringing your hands and saying the sky is falling is a little premature. Being prepared is always a good idea. Definitely keep a significant store of food, water and ammunition as well as contingency plans at the ready.
Fed=>QE Infinity=>dollar devaluation=>hyperinflation=>riots/chaos=>national emergency=>martial law=>governmental takeover of all industries/businesses…..
I would jump ship too and sell my stake too…..
This flow chart can be applied to everything that is happening now …..it explains the coming collapse from which all other actions (past, present and future) have their genesis in….
Why would you ride a company’s stock all the way to zero? Over the course of 30 years you’re never going to shift your portfolio around? And how does GOOG not have staying power? They are at all time highs and dominate their market. Like ’em or hate ’em they will be the most innovative company out there in the tech market. I’m not saying you should buy them, it depends on your strategy… they don’t pay a dividend.
There’s no date on this article, so I don’t know how old it is, but judging from some other comments I expect it came out shortly after the news of Schmidt selling his stock became public. There are TONS of reasons a top exec will sell his stock. Not many of them have to do with the company’s potential shortcomings. That is a rational fear among shareholders, but if you are doing your due diligence (like you SHOULD be if you are holding stock!) the risk of an Enron type of situation is very small. Has anyone considered other possibilities? Did you know that Schmidt stepped down as CEO? Did you know that Schmidt is in an ugly divorce? Did you know that he is a habitual philanderer and needs to pay a SUBSTANTIAL settlement to his former wife?
http://www.ceo.com/flink/?lnk=http%3A%2F%2Fwww.nypost.com%2Fp%2Fpagesix%2Fdivorce_prep_google_style_DKPiNhGlJloeC5TsCWUNlK
It’s good to think critically, but too much cynicism can hurt you just as much. Do your homework, but get out there and enjoy life! Living in constant fear is no life. Trust me.
this is an old artical from 2013.
Anything in life is a risk. I’ve been looking at a wide variety of companies. Food, auto, pharma, tech. Low dividend yield, but have the staying power that some (like Google) don’t have. It’s not perfect, but then looking at 30 years to invest, why not? The market going down is the best time to buy. Sure, I’ll lose some money, but I’ll also be buying more for when the market is back up. And by reinvesting the dividends, even if a company goes under, I’m only out what I actually spent out of pocket. That mitigates some of the risk for me.
Give a listen to this radio interview with Jim Fitzgibons & Dick Morris about what’s coming which ties into what this topic hints at. I hope it hasn’t come true before you listen.
http://nyc.podcast.play.it/media/d0/d0/d1/d3/dE/d6/dG/13E6G_4.MP3
Seems to me the market in dotcom companies is just too speculative for the average man. If you got money to gamble with, I guess this is possibly as good as any for the short term. However, to me it’s like putting money in the banks to day, that is if you don’t mind losing it because of the fools running them need to cover their bad bets.
Still the stock market is the only place for the little guy. As a prepper and surely one of the little guys, my market bets are in gold mining or silver mining stocks. Great for short term (bets), but if the system does not fail as we believe, you have long term investment with potential to see gains. This is true for many mining stocks, especially those in rare metals and precious metals.
However, food and other survival stock are my needs now and it’ll be sometime before I have enough money to save or bet on anything.
James, you are right that if you aren’t educated as to what you are doing you should not be doing it. I further agree that having food and other basic necessities should be stockpiled for a “rainy day” but I don’t agree with your assessment of the mining companies. Owning a mining company you assume individual risk of the firm and you aren’t playing the gold or silver directly anymore. It’s kind of like an option on gold or silver. Did you hear about Rio Tinto that had the huge mudslide in their primary copper mine in utah? Yes, have some silver at home to hedge against economic collapse, but in my opinion you are taking on more risk than you think with the miners.
Thanks for the informative piece, always enjoy them. Well what did we expect from our pay to play society and government. We were always brought up to trust and help our fellow man, but it seems ever so increasingly changing from a all for one, to all for myself. What a shame.
Market wise, I have been blessed to learn of indicators which signal these types of exits before they happen keeping me safe, but I don’t play much any more, if I can resist the temptation.
Thanks again, for doing what you do, and remind all to keep on their elected officials hold them accountable, be vocal and exercise their freedom of speech.