Google founders to offload 14 million shares Options

[newsguy]

http://www.abc.net.au/news/newsitems/20041...11/s1248082.htm

More shares being issued. More $ for Google!

[bragadocchio]

So? What does this mean for Google? What does this mean for the rest of us?

[Tim]

I noticed you posted a link to an Australian news site. Is this new round of shares available outside the US?

[newsguy]

Not to my knowledge. I heard a rumor that Google was going to be releasing more shares to raise more cash, and the Australian ABC affiliates was the first place I saw the news break.

[newsguy]

As for what it means, it means that Google is raising more money for more projects and investment. I'm sure this is because MSN is geared up to fully release their search engine and Google knows they've got the cash to push it, so they want the cash to fight back.

[bragadocchio]

The sales are from shares held by Brin and Page amd Schmidt. It's not unusual, and not uncommon for the executives and directors of a company to sell some of the shares of the stock of a company sometime after an IPO.

Here's most of the filing from the SEC:

On September 15, 2004, Larry Page, Sergey Brin and Eric Schmidt each adopted stock trading plans in accordance with guidelines specified under Rule 10b5-1 of the Securities and Exchange Act of 1934 and Google’s policies regarding stock transactions. In the future, they will begin selling a portion of their Google stock pursuant to these stock trading plans. 

Larry Page is a Co-Founder of Google and serves as Google’s President, Products and Sergey Brin is also a Co-Founder of Google and serves as its President, Technology. Dr. Eric Schmidt is Google’s Chief Executive Officer. 

These pre-arranged stock trading plans were adopted in order to allow Larry, Sergey and Eric to sell a portion of their Google stock over time as part of their respective long-term strategies for individual asset diversification and liquidity. The transactions under these plans will be disclosed publicly through Form 4 and Form 144 filings with the Securities and Exchange Commission. Using these plans, they can gradually diversify their investment portfolios and can spread stock trades out over an extended period of time to reduce market impact. Because these plans were established well in advance of a trade, they also help avoid concerns about whether these officers had material, non-public information when they made a decision to sell their stock. 

Larry, Sergey and Eric currently hold approximately 90.5 million shares of Class B common stock, which represents approximately 33.0% of Google’s outstanding capital stock and approximately 45.7% of the voting power of Google’s outstanding capital stock. Under the terms of these Rule 10b5-1 trading plans, and as a part of an 18 month diversification plan, Larry and Sergey each intend to sell approximately 7.2 million shares. If they complete all planned sales under these trading plans, they will retain approximately 81.1% of their current holdings of Google stock. Eric intends to sell approximately 2.2 million shares under his Rule 10b5-1 trading plans as a part of an 18 month diversification plan and if all planned sales under these trading plans are completed Eric will retain approximately 84.6% of his current holdings of Google stock. If Larry, Sergey and Eric complete all the planned sales under these Rule 10b5-1 trading plans, they would continue to collectively own approximately 73.9 million shares, which would represent approximately 27.0% of Google’s outstanding capital stock and approximately 40.4% of the voting power of Google’s outstanding capital stock (assuming no other sales and conversions of Google capital stock occur). 

Each of our executive officers has also entered into Rule 10b5-1 trading plans in order to sell a portion of their Google stock. Sales made pursuant to these plans will be disclosed publicly through Form 4 and Form 144 filings with the Securities and Exchange Commission.

The notice given by the directors is the type of disclosure that needs to be given when people who might be in possession of material inside information about the operation of a business want to sell some shares of the company. Here's a snippet from the rule:

© Affirmative defenses. 

(1)(i) Subject to paragraph ©(1)(ii) of this section, a person's purchase or sale is not \"on the basis of\" material nonpublic information if the person making the purchase or sale demonstrates that: 

(A) before becoming aware of the information, the person had: 

(1) entered into a binding contract to purchase or sell the security, 

(2) instructed another person to purchase or sell the security for the instructing person's account, or 

(3) adopted a written plan for trading securities; 

( the contract, instruction, or plan described in paragraph ©(1)(i)(A) of this Section: 

(1) specified the amount of securities to be purchased or sold and the price at which and the date on which the securities were to be purchased or sold; 

(2) included a written formula or algorithm, or computer program, for determining the amount of securities to be purchased or sold and the price at which and the date on which the securities were to be purchased or sold; or 

(3) did not permit the person to exercise any subsequent influence over how, when, or whether to effect purchases or sales; provided, in addition, that any other person who, pursuant to the contract, instruction, or plan, did exercise such influence must not have been aware of the material nonpublic information when doing so; and 

© the purchase or sale that occurred was pursuant to the contract, instruction, or plan. A purchase or sale is not \"pursuant to a contract, instruction, or plan\" if, among other things, the person who entered into the contract, instruction, or plan altered or deviated from the contract, instruction, or plan to purchase or sell securities (whether by changing the amount, price, or timing of the purchase or sale), or entered into or altered a corresponding or hedging transaction or position with respect to those securities. 

(ii) Paragraph ©(1)(i) of this section is applicable only when the contract, instruction, or plan to purchase or sell securities was given or entered into in good faith and not as part of a plan or scheme to evade the prohibitions of this section. 

(iii) This paragraph ©(1)(iii) defines certain terms as used in paragraph © of this Section. 

(A) Amount. \"Amount\" means either a specified number of shares or other securities or a specified dollar value of securities. 

( Price. \"Price\" means the market price on a particular date or a limit price, or a particular dollar price. 

© Date. \"Date\" means, in the case of a market order, the specific day of the year on which the order is to be executed (or as soon thereafter as is practicable under ordinary principles of best execution). \"Date\" means, in the case of a limit order, a day of the year on which the limit order is in force. 

(2) A person other than a natural person also may demonstrate that a purchase or sale of securities is not \"on the basis of\" material nonpublic information if the person demonstrates that: 

(i) The individual making the investment decision on behalf of the person to purchase or sell the securities was not aware of the information; and 

(ii) The person had implemented reasonable policies and procedures, taking into consideration the nature of the person's business, to ensure that individuals making investment decisions would not violate the laws prohibiting trading on the basis of material nonpublic information. These policies and procedures may include those that restrict any purchase, sale, and causing any purchase or sale of any security as to which the person has material nonpublic information, or those that prevent such individuals from becoming aware of such information.

[Black_Knight]

Yup.

It means that Brin, Page and Schmidt want to have some cash in their accounts, not just a technical worth in share values somewhere. It might even mean that they intend to put some personal investments elsewhere, and have some places in mind. Seeing one long-term investment pay off often inspires confidence to make a fresh long-term investment.