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Eric Schmidt To Sell Up To 42% of Stake In Google
derGoldstein writes "AllThingsD reports that Eric Schmidt 'plans to sell up to 3.2 million shares of his class A common stock in the company,' according to an SEC filing. 'The amount is equal to approximately 42.1 percent of his overall stake in Google.'"
Diversifying investment portfolio is something that all good investors tend to do. Eric Schmidt is a businessman too.
Careful with the vagueness there. That's 42% of his stake in Google, not to be confused with 42% of the company's stock.
I am not exactly sure what insider trading is, but since he not only knows the inner workings of Google but controls them, how is this not insider trading?
It *IS* insider trading. Any CEO selling their own stock is insider trading. That is why the SEC requires documentation and a public disclosure of any potential transaction before the sale happens, which is what the linked document is. The SEC cannot prohibit such sales, but they do put them under extremely tight restrictions - such as preventing such sales near the end of a quarter, when financial results are known internally but not yet released.
It is important to note that this does not mean that Eric *is* going to sell 42% of his stake, it means that he is now *allowed* to sell *up to* 42% of the stock. Many such filings end up with a smaller amount sold.