It seems that the biggest sellers of Google (NASDAQ:GOOG) stock these days are the two men who investors should want invested in the company long-term. Since June 15, Larry Page and Sergey Brin have sold 266,664 shares of Google stock for total proceeds of $144.9 million so far.
But before you go selling your Google stake, like Page and Brin, you should know that this is part of a long-term plan by the two to divest from the company. Earlier this year, the two filed a 10b trading plan to sell $4.4 billion of stock over the next two years. This plan takes the timing of trades out of their hands and still allows them to sell a large amount of stock long-term.
Good news and bad news for Google shareholders
The bad news is that by the time the trading plan is complete Page and Brin will own about half as much of Google as they did when it went public. But they’ll retain enough of their super-voting shares to maintain control of the company, at least for now. But their majority when it comes to voting will be down to 52%, so they can’t sell much more without losing complete control over Google.
Founders selling is never a great sign but given the immense wealth Google has made for its founders its understandable that they want to divest some of their stake. This is a similar strategy to what Bill Gates started to do years ago in selling Microsoft (NASDAQ:MSFT) shares, where he is no longer the largest shareholder (Steve Ballmer holds that title).
But as founders step back from their roles it signals a new phase for maturing companies. The fact that Page and Brin own less of Google than they did at IPO should be noted, but it’s also not a reason to run for the hills if you’re an investor. They still have a lot riding on the company’s success.
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