Beyond.Com Corp [Bynd] – Brief Article

Beyond.com has been aggressively pushing its strategy to become the leader in online software shopping for consumers, businesses and government–a lofty goal considering the intense competition for e-commerce. While the company has relationships with the likes of AOL, C/Net and Excite@Home, some would argue that Beyond.com’s customers come at too costly a price. It remains to be seen whether the company’s commitment to a high level of sales and marketing expenditures will pay off in the long run. In the meantime, several insiders are choosing to cash in some of their shares even though the stock has fallen well off its April highs. From July 21 to August 25, five insiders sold 248,500 shares at prices descending from $23 to $15 per share.

CTO John Pettitt sold 100,000 shares at $15. Mr. Pettitt has continued to drop shares at successively lower prices, selling in April at $33, in May at $23, and now in August at $15. In all, he has reduced his actionable position (exercisable options plus common shares) by 15% since April. Similarly, VP Corporate Development Bong Suh started selling shares in early August at $22 and continued to sell when the stock dropped to $16-$17, for a total of 109,500 shares sold. Mr. Suh trimmed his actionable position by 15% with his August sales. Director Bert Kolde sold 10,000 shares or 25% of the shares directly in his actionable holdings. Mr. Kolde does indirectly hold more than 2.9M shares through Vulcan Ventures Inc; however, the sale of shares from his personal account marks a clear reversal since the June ’98 IPO, when he purchased shares. The other sellers include VP Business Operations & Corporate Strategy James Lussier and VP Worldwide Sales Alan DeClerck, who sold 24,000 and 5,000 shares respectively at $20-$23 per share.

Logically, one would expect these insiders to wait for a higher stock price to sell if they truly considered their stock undervalued. In that sense, insider selling at incrementally lower prices is never encouraging, and certainly, that these insiders continued to sell at successively lower prices could be taken as a sign of capitulation to the downtrend. Beyond.com is an online retailer of commercial off-the-shelf computer software to the consumer, small business and large enterprise markets.

COPYRIGHT 1999 American Banker-Bond Buyer

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