Call it a Cash-22, if you will: Executives at networking firms that struck gold with the initial public offering boom of 1999 and 2000 now want to sell some of their restricted shares. But by law they must report plans to sell this stock, which they acquired as founders shares or through stock options, to the Securities and Exchange Commission, which makes this info publicly available. The catch: Public investors get skittish when they hear of pending insider sales.
One solution is to form corporations or limited partnerships that make the sellers less transparent. And thats what William Miller, a founder and chief technology officer of StorageNetworks Inc. (Nasdaq: STOR), a storage services provider, appears to have done.
Miller put 1 million of his StorageNetworks shares in a corporation called BMAAM, of which he is the sole owner. He also put 2.4 million shares in a limited partnership called MAWAM, of which he is the general partner and his children are limited partners.
Since May, Miller has filed plans to sell 550,000 shares from BMAAM for about $7.2 million. This includes a Nov. 14 filing to sell 250,000 shares for about $1.6 million. And on Oct. 23, he filed plans to sell 200,000 shares for about $1 million from MAWAM.
An irate StorageNetworks spokeswoman declined to comment on either of the entities -- not even on what the acronyms stand for.