PayPal Execs Cashing Out
from the get-me-my-money dept
There is a general rule of thumb that if executives are selling their shares in a company, then you should probably be selling as well. Of course, there are a few exceptions, but it does seem a little alarming that PayPal top execs are selling significant portions of their holdings in a secondary offering. It's understandable to sell some shares for diversification purposes, but selling large percentages of your holdings certainly seems questionable.
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venture capitalists vs. entrenched interests
stiffs have to hold their stock for a certain
amount of time, while the venture capitalists
milk the IPO for all it's worth during the first
few months/weeks of the offering.
A secondary offering is much akin to a split.
looking the the short, young chart for PayPal,
it's clear that a split is not justified. So,
the execs are doing the next best thing and
attempting to leverage their shares.
Given the most recent news, it's probably worth
avoiding PayPal. I think there are enough
institutions out to get it that PayPal won't
survive in the long run.
On the other hand, if the secondary offering
sparks some optimism among investors, the you
might be able to ride the execs coat tails, but
at 17/1 P2E, the stock is a dog and will continue
to be for quite a long time (unless something
really revolutionary happens in the field of
electronic payments)
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