SERGEY BRIN, president of technology at Google, made nearly $80 million (£42 million) last week from the sale of 400,000 of shares in the internet search engine that he co-founded with his college friend Larry Page.
The sell-off came days before 177 million more Google shares became available for sale yesterday, as the final restrictions on employees selling their stock allocations were lifted.
Google shares fell 12 per cent last week, amid fears that the stock would flood the market after the last restrictions.
The restrictions, part of Google’s initial public offering (IPO) six months ago, aimed to avoid an immediate sell-off after the company was floated.
It is not known how many shares hit the market yesterday.
Advertisement
Francis Gaskins, president of IPODesktop.com, which provides research on IPOs, said that Google’s founders would continue to cash in on the company’s success and institutional buyers would buy the shares. He said: “It’s because the valuation is so high and the company’s only six years old (that the founders) figure ‘why not?’.
“They’ve gotten their pop; whether it goes up 50 per cent or not at this point they don’t care. But to institutional buyers it’s hard to find gains (like those they could get with Google).”
Mr Brin and Mr Page were not expected to make major share sales yesterday. The pair, along with Eric Schmidt, the chief executive, have drawn up stock-selling plans of when future sales of shares will occur and the amount to be sold.
Chief executives often draw up such plans to avoid attracting criticism for selling stock in their own company. The plan forces the trio to retain 74 million shares until March 2006.
Analysts said other employees might be discouraged from selling by new tax rules that levy 35 per cent taxes on sales of shares or options owned for less than one year. This compares with the 15 per cent tax they would pay on investments held for more than a year.
Advertisement
The options were worth 30c in 2000 and $3.67 in 2003, but many employees may disregard the penalty.
Google shares closed yesterday $5.59 higher at $192.99.