Xbox executive Robbie Bach suspiciously sells stock prior to the Xbox warranty-extension announcement.
Microsoft’s President of Entertainment & Devices Division Robbie Bach, the man overseeing the Xbox and Zune projects, reported in a series of Securities and Exchange Commission filings that he had sold $6.2 million worth of Microsoft shares over the course of one month prior to the announcement that Microsoft would be extending the warranties on all Xbox 360 consoles to three years to the tune of $1 billion. The selling began May 2 and proceeded until May 30, a few weeks before Bach and company made the July 5th announcement on a corporate conference call. Although executive stock options are locked and scheduled as to when and how much one can cash out at a time, Bach had not released a single share in the previous eight months and did not face such restrictions. Whether or not these movements are considered insider trading, Bach would not of lost much on the $.50 drop that Microsoft’s share price took on the day of the conference call.
Microsoft spokesman Eric Hollreiser replied, “Robbie Bach’s past trading is completely unrelated to last week’s announcement. … [He] continues to hold a significant stake in Microsoft and remains confident in the long-term success of the company.”
Ben Silverman, director of research at Indie Research, a firm that tracks insider selling, gives Bach the benefit of the doubt. “It doesn’t necessarily mean [insiders] think that there will be a bad event; it could just be financial planning. But sometimes it just looks bad that an insider has sold stock. I’d give [Bach] the benefit of the doubt here, especially because the stock didn’t move very much.”