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Adtran Insiders a Busy Bunch

Access networking gear maker Adtran Inc. (Nasdaq: ADTN) ended 2003 with the one of the highest insider sales volumes of any company in the public markets, according to information distributed by Thomson Financial on Tuesday. The company had sales of $510 million in shares from corporate insiders, broadly defined as those who have access to non-public, material information.

Microsoft Corp. (Nasdaq: MSFT) led all insider sellers by disposing of stock worth $3.4 billion during the year. Dell Computer Corp. (Nasdaq: DELL) and Time Warner Inc. (NYSE: TWX) were the only two other companies that unloaded more stock than Adtran.

Individuals topping the list included Adtran CEO Mark Smith, who sold some $460 million in shares last year, making him the fifth highest volume seller during the year. Microsoft CEO Steve Ballmer, Dell founder Michael Dell, Ted Turner, and Microsoft chairman Bill Gates all sold more than Smith during the year.

For its list Thomson tracked only direct transactions at companies having a market capitalization greater than $100 million.

What's it all mean? That depends. "The meaning behind any one insider's selling (or buying) activity is very individual," explains Thomson's Insider analyst Kevin Schwenger in an email to Light Reading.

Sometimes insiders sell to diversify their investments, or to make a down payment on a house, for example. Other times, selling can show that an executive has lost confidence in where a company's heading. The latter certainly doesn't appear to be the case with Adtran.

In fact, in 2003, Adtran watchers would have done well to watch Smith, and do the opposite. Following five of Smith's stock sales in 2003, Adtran's stock gained an average of 46.5 percent. "He is not a very prescient seller," writes Schwenger.

Adtran didn't have a Carrier Access Corp. (Nasdaq: CACS) kind of year in 2003, but it didn't do badly (see 2003 Top Ten: Explosions & Implosions). Between January 15 and December 15, 2003, the company's shares rose 58 percent, from $20.10 to $31.90.

Adtran didn't respond to a request for comment on Tuesday.

— Phil Harvey, Senior Editor, Light Reading

BobbyMax 12/5/2012 | 2:44:11 AM
re: Adtran Insiders a Busy Bunch Most of the insider's trade is inspired by the large number of stock options granted to the company insiders. These crooks invade the company in large groups making it impossible for SEC to catch yhem. Below cost stock options is other factor that prompts insider sales.

There is still a lot of corruption in the companies and the governments unwillingness to take any action.
technonerd 12/5/2012 | 2:44:10 AM
re: Adtran Insiders a Busy Bunch Most of the insider's trade is inspired by the large number of stock options granted to the company insiders. These crooks invade the company in large groups making it impossible for SEC to catch them.
This variant of insider trading is legal under certain restrictions. Of all the insider trading, it's the easiest the regulate and is in fact fairly closely watched. The real criminal stuff is the insider trading the occurs outside of the type regulated and disclosed.
technonerd 12/5/2012 | 2:44:08 AM
re: Adtran Insiders a Busy Bunch Mark Smith is the founder of Adtran. He started the company in the mid-1980s. I think Smith is one of the most ethical people in the telecom equipment industry. He was diagnosed with throat cancer a few years ago. It wouldn't surprise me if his stock sales weren't related to estate planning. This guy is NOT part of the Silicon Valley crimimal class -- anything but.
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