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Freescale Semiconductor, Ltd. Message Board

  • gecmc94 gecmc94 Jan 7, 2013 4:40 PM Flag

    Former CEO and actual board director Rich Beyer sold many shares

    He sold 350,000 shares out of 450,000 available in early Dec 2012.
    He sold 320,000 shares out of 2,550,000 available in early Jan 2013 (stock options).

    Bottom line: he sold about 25% of his shares recently. He feels this is a local peak of the semiconductor momentum and sells some. Pay some attention to this.

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    • D'uh, he has to sell shares now that the company is public to cover his realized capital gains.

      How long you been doing this?

      As soon as his stock became publicly traded equity he took a SERIOUS capital gain that has to be offset. This is one of the dilutative effect of their efforts that business founders and early insiders have to look forward to as a part of going public, unless you can cover the gains against par on your own.

      Even Zuckerberg had to sell some of his FB shares to settle tax requirements. It's also a reason he shifted the real power of the company to the preferred stock. This way he can take a serious hit on his common stock holdings and not dilute ANY significant amount of his voting authority.

      • 1 Reply to clgl_fubar
      • You are making a mistake to put Zuckerberg (owner of 25% of facebook) and a typical CEO on the same page. Beyer is only CEO. He received a healthy compensation package when being hired after the LBO. He paid taxes on the liquid part of that compensation when that was due, not these days.

        You are also wrong when arguing that the unrealized capital gains are taxable. They are not and this situation does not compare with the case of mutual funds that liquidate winning assets in a downtrend and generate taxes that are shared across shareholders regardless of the gain/loss of their account. If you really know more about the financing you better come with some facts.

        Beyer did not need to sell his stock to realize the gain and be taxed if he thought this is an undervalued company. What Beyer's act is telling us is that, for him, the former CEO of the company for 4 years, which knows the company inside-out and its potential, the CURRENT VALUATION IS A GOOD SELL. He also knows that there could be ups and downs as the semiconductor industry is cyclical and he might hope for the better for the remaining shares in the distant future. But, for now, it is a good price to sell. Or, he urgently needed a holiday property in Dubai and dig deep into the pockets for several millions (and that his checking accounts hiring compensation package are already depleted).