Light Reading

CEO Chambers Selling Cisco Shares

Craig Matsumoto
News Analysis
Craig Matsumoto
12/21/2012
50%
50%

CEO John Chambers has prepared a plan to sell 2.8 million shares of Cisco Systems Inc. stock by September 2014, according to a filing with the Securities and Exchange Commission (SEC) Friday afternoon.

Nearly half the shares, 1.3 million, will come from stock options granted in 2005 and set to expire in September 2014; Chambers will be exercising the options and selling the shares. The other 1.5 million will come from his own holdings.

Chambers owned 8.7 million shares of Cisco, 5.7 million of them in the form of unexercised options, as of July, according to a separate SEC filing.

Why this matters
Investors never like to hear that a CEO is selling shares. They'd prefer to see an executive buy shares, showing confidence in his company's future growth and all that. (See Infinera CEO Shows He's a Believer.)

That's probably why this filing was timed for the Friday before Christmas. That said, it's a standard plan under SEC Rule 10b5-1, where Chambers will sell pre-set numbers of shares at regular intervals, the idea being to prevent accusations of unfair inside trading. An executive is only allowed to start a 10b5-1 plan when not in possession of material, non-public information.

For more



— Craig Matsumoto, Managing Editor, Light Reading

(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Pete Baldwin
50%
50%
Pete Baldwin,
User Rank: Light Beer
1/5/2013 | 2:03:25 AM
re: CEO Chambers Selling Cisco Shares


Not a bad late-Friday catch, but I wonder if Phil's Overture scoop takes the prize as the bigger Friday news haul.


(Google also invested more in 23andme, for those who care about such things.)

paolo.franzoi
50%
50%
paolo.franzoi,
User Rank: Light Beer
1/5/2013 | 2:03:24 AM
re: CEO Chambers Selling Cisco Shares


Craig,


You have one mistake.  A CEO is ALWAYS in possession of Material Non-Public Information.  Plans are set to start usually a quarter in the future and must be followed or stopped with a delay then to start another plan.  The idea of a selling plan is that it is mechanical.  It can be simple or complex (the formula for selling shares) but it can not be a choice.  So, most of the time a 1q delay before the start represents being out of touch with the material non-public information for 90 days in the future.


These plans are basically for all C level and other registered executives, who I said are ALWAYS in possession of material non-public information.


seven


 

paolo.franzoi
50%
50%
paolo.franzoi,
User Rank: Light Beer
1/5/2013 | 2:03:24 AM
re: CEO Chambers Selling Cisco Shares


 


Craig,


You are missing the subtlety.  The idea is that a plan is put in place before it can be used so that Chambers does not theoretically have material non-public information today about Q2 next year.  He DOES have material non-public information about this quarter.  So, the idea is that the delay in the start of the plan makes the current set of information public by the time the plan goes into execution.


So, again the whole idea of the plan is file now - delay - execute plan.  The delay is supposed to either make public or non-material the information held today.  But both now and 2 quarters from now Chambers has material non-public information.  He just (theoretically) does not have material non public information that far in the future.


seven


 

Pete Baldwin
50%
50%
Pete Baldwin,
User Rank: Light Beer
1/5/2013 | 2:03:24 AM
re: CEO Chambers Selling Cisco Shares


So true, Seven. Thanks. The part about "material non-public information" is the SEC's wording, not mine, so maybe I should have put quote marks around it. Whether such a thing is practical or not, well... talk to the SEC...  :)

From The Founder
Against the odds, Huawei is growing its telecoms networking equipment business in the US -- that should be ringing some alarm bells for domestic vendors.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Between the CEOs
CEO Chat With Jeff Miller, ActiveVideo

8|28|15   |   19:05   |   (0) comments


Jeff Miller, President and CEO of ActiveVideo, talks to Light Reading founder and CEO Steve Saunders about the impact of virtualization on the TV and video distribution market.
LRTV Huawei Video Resource Center
Vodafone: Mobile Money Is About Customer Trust

8|27|15   |   06.36   |   (0) comments


Light Reading spoke with Vodafone's Ian Ravenscroft about the unique responsibilities and opportunities facing operators handling customers' financial transactions over the network.
Telecom Innovators Video Showcase
Palo Alto Networks on Expanding in the Carrier/Service Provider Market

8|26|15   |   07:54   |   (0) comments


Alfred Lee from Palo Alto Networks tells Steve Saunders about their new chassis-based system, the PA-7080, and how it can benefit service providers compared to legacy firewalls.
LRTV Custom TV
Global Services Forum Preview

8|25|15   |   02:36   |   (0) comments


Light Reading's CEO and Founder Steve Saunders talks about Huawei's upcoming Global Services Forum with the help of Heavy Reading's Patrick Donegan and Teresa Mastrangelo.
Telecom Innovators Video Showcase
Infoblox on DNS Threat Index

8|19|15   |   04:39   |   (0) comments


Dilip Pillaipakam from Infoblox talks to Steve Saunders about his company's core network services.
Between the CEOs
CEO Chat With Ihab Tarazi, Equinix

8|14|15   |   20:18   |   (1) comment


Equinix CTO Ihab Tarazi talks to Light Reading founder and CEO Steve Saunders about the dramatic changes in the data center, cloud and interconnect markets and discusses the impact of SDN and NFV in the coming years.
Telecom Innovators Video Showcase
The Netformx Ecosystem

8|14|15   |   09:39   |   (1) comment


Ittai Bareket, CEO of Netformx, talks with Steve Saunders about the Netformx Ecosystem, which employs cutting-edge prescriptive analytics to help solution providers maximize profits.
Telecom Innovators Video Showcase
Versa Networks on Leveraging VNFs

8|12|15   |   07:37   |   (0) comments


Kumar Mehta, founder and CEO of stealth mode startup Versa Networks, talks with Steve Saunders about how providers can best leverage virtualized network functions (VNFs).
LRTV Custom TV
Transforming the Network Through OPNFV

8|5|15   |   7:09   |   (0) comments


Sandra Rivera, VP Data Center Group; GM Network Platforms Group, Intel Corporation, on OPNFV Arno and how the industry is coming together to accelerate the deployment of NFV and transform the network.
LRTV Huawei Video Resource Center
Huawei ONS Product Demo

8|3|15   |   6:01   |   (0) comments


Huawei shows at Open Networking Summit 2015 in Santa Clara how its SDN and NFV solutions embrace openness.
LRTV Custom TV
End-User or Enterprise Benefits to the New IP

7|30|15   |   04:27   |   (1) comment


Andrew Coward discusses what the New IP means to end users or enterprise customers. He explains compelling reasons, including how every customer can get their own network, from the transformation to the New IP.
LRTV Custom TV
Network Visibility & the New IP

7|30|15   |   02:23   |   (0) comments


Mukund Srigopal provides an explanation of what network visibility is and how it is essential as service providers transition to the New IP. In addition, the importance of the network packet broker is discussed.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
November 17, 2015, Santa Clara, California
December 1, 2015, The Westin Times Square, New York City
December 2, 2015, The Westin Times Square, New York City
All Upcoming Live Events
Infographics
Cisco's cloud and virtualization portfolio can increase business agility and innovation by building a more flexible network architecture.
Hot Topics
Verizon Hums a Driving Tune
Sarah Thomas, Editorial Operations Director, 8/26/2015
Gogo Approved to Speed Up In-Flight WiFi
Sarah Thomas, Editorial Operations Director, 8/24/2015
Could Market Volatility Hurt Tech IPOs?
Dan Jones, Mobile Editor, 8/24/2015
Sprint's Claure: '3 to 5 Years' to Turnaround
Dan Jones, Mobile Editor, 8/25/2015
Like Us on Facebook
Twitter Feed
September 22, 2015
Media Begins With “Me”
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Jeff Miller, President and CEO of ActiveVideo, talks to Light Reading founder and CEO Steve Saunders about the impact of virtualization on the TV and video distribution market.
Equinix CTO Ihab Tarazi talks to Light Reading founder and CEO Steve Saunders about data center, cloud and the impact of virtualization in the coming years.
Cats with Phones
Cats Are a Smartphone's Best Friend Click Here
Whoever said cats didn't live to please their humans?