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back to article John Chambers sold millions of shares on first day of Cisco Live!

Paperwork filed with the Securities and Exchange Commission show that as Cisco's CEO was wandering around the Moscone Center keynote room delivering his annual address to the Cisco Live! Conference, his brokers were selling shares in the company hand over fist. According to the latest SEC Form 4 filing, Chambers sold 2,050,000 …

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  1. A Non e-mouse Silver badge

    So he's sold some Cisco shares at $24 a pop, yet bought another load of shares at $17 a pop. If you could make a 40% profit, wouldn't you?

    I accept his total number of shares has shrunk, but maybe he's looking towards his retirement and wants to liquidate his assets? After all, if you have a large number of shares, selling them slowly is a much better way than dumping the lot in one go.

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    1. Chris Miller
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      Exactly. The interesting question is: when did his option to buy at $17.86 expire?

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  2. unitron

    I wouldn't want to invest long term in a company run by someone stupid enough to keep all of their money tied up long term in just the stock of that company.

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    1. Don Jefe
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      Why? You'd rather invest in a company run by somebody stupid enough to exercise his options and pay taxes on everything? I'm not sure you really grasp how how this works.

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      1. Anonymous Coward
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        Anonymous Coward

        Unitron is just stating he wouldn't like to follow someone that keeps all their eggs in one basket.

        I think that's fairly simple to follow?

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        1. Craig 2
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          To continue the metaphor: I think that investing in someone who is keeping all his own eggs in the basket he's responsible for isn't so stupid. It's when he starts selling the eggs that he might not be so careful with the basket...

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          1. Anonymous Coward
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            Anonymous Coward

            at least he isn't buying shares in basket makers.

            Not that we know about, anyway.

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            1. Graham Dawson Silver badge
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              As long as he buys shares in more than one basket maker it's all fine.

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  3. Johan Bastiaansen

    Don't put your eggs in one basket

    That's good advice, if you buy stock.

    However, if you get paid in stock options, it's like being handed a basket of eggs.

    I'm sure he reinvested most of that money, and he didn't buy Cisco shares.

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  4. ecofeco Silver badge

    Coincidene

    Pure coincidence, I'm sure.

    All legit too. Just ask him and his lawyers.

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  5. Gambler

    investigation initiated

    He sold 20+ million worth of stock and options and reinvested at a lower price with a different option- bravo! The problem is that he is the CEO and has useful information that would help him to make such a trade profit ALMOST guaranteed. That is why the SEC is smelling blood in the water. The timing is almost uncanny and if it seems too good to be true, it probably is. He may be in club fed before long, having long walks of the perimeter fence at sunset. Insider Trading is no game and it almost never goes unnoticed by the watchdogs. 'better have a great lawyer because you're going need flesh-eating ones and they are not cheap

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    1. Mark 85
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      Re: investigation initiated

      Have an upvote... you beat me to it. I was thinking the same thing. Looks like he was thinking the stock was going to drop to sell when he did. If he'd thought it was going to rise, he would have waited. a day or two.

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  6. Anonymous Coward
    Anonymous Coward

    Not sure that it is as suspicious as it seems at first....

    Based on listed companies in the UK:

    - senior people have very limited windows for buying and selling shares, particularly if they are involved in a lot of acquisitions.

    - depending on how the sale is managed, it may have been beneficial from either a tax or commission perspective to trade shares rather than pay cash for the options.

    - even if there is no direct benefit from selling the shares, getting hold of the amount of money required for the options would probably have their own costs given the amount.

    If there is a conspiracy, I think there needs to be a little more evidence.

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  7. Carl Pearson

    Run The Numbers

    SharesSold = 2050000;

    PricePerSold = 24.31;

    SharesBought = 1300000;

    PricePerBought = 17.86;

    ValueSold = SharesSold * PricePerSold; // 49,835,500

    ValueBought = SharesBought * PricePerBought; // 23,218,000

    ValueRemaining = ValueSold - ValueBought; // 26,617,500

    NetAddition = SharesBought * PricePerSold; // 31,603,000

    // Net Addition is value of purchased shares at current per-share price,

    // NOT the per-share purchase price!

    FinalProfit = ValueRemaining + NetAddition; // 58,220,500

    // CLEVER, CLEVER BEAN COUNTERS!

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