Jerry Yang Dumping Yahoo! Shares (YHOO, MSFT)
February 11, 2010 by Douglas A. McIntyre
Yahoo! Inc. (NASDAQ: YHOO) holders probably never want to hear the name Jerry Yang again. Well, those same holders will love this… Tonight after the close a filing at the SEC from Yahoo! showed that Jerry Yang is going to be selling stock in the company. David Filo, the other Yahoo founder, is also selling shares. Normally insider selling or founders selling is viewed with some caution. That doesn’t seem to be the case here, and for good reason.
The filing notes… In February 2010, Jerry Yang… transferred 3 million shares of Yahoo! common stock to a blind trust managed by a third-party trustee who will have complete discretion…. to be sold or otherwise disposed. The trust is scheduled to end by December 31, 2010.
Also noted in the filing is that in February 2010, David Filo, also established a share sale plan to sell up to 2 million shares of Yahoo!with a prearranged trading schedule over a 12-month period beginning in May 2010 on the open market at market prices.
Both plans are under the Rule 10b5-1 trading plan policy. Normally it is bad when a founder sells shares, but that should not be the case here. It is more shares entering the public float, but this may be a good instance of dilution as it gets Jerry Yang less and less entrenched and takes away more and more influence he can have in the company.
A filing from April 2009 shows that Yang had 33.6+ million shares in indirect ownership of Yahoo!. That number of total shares in direct and/or indirect holdings may be very different now (update Form 4 shows 27.08 million held in trust after this posted and then 20.72 million in a family partnership). It might have been better if Yang were able to just sell all the shares he holds, whatever the real share count is. The 2% or 3% hit from the instant increase in the public float would be worth it in the long run because it would prevent Yang from ever being able to have any say about anything down the road.
By our take the last good thing that Jerry Yang did was leave Yahoo! after botching the Microsoft Corp. (NASDAQ: MSFT) deal. Ask anyone inside Yahoo! if they think Yahoo! could command that buyout price now after the last two years.
Three million shares… too bad it isn’t all the shares he holds.
JON C. OGG
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