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Insiders at some of the hottest private and publicly traded internet companies unloaded substantial personal stakes ahead of the slump in tech stocks that started at the beginning of March.
The selling has stirred unease among some investors, who see the sales as opportunistic moves revealing a lack of confidence in their companies' stock prices as shares in the fastest-growing internet companies soared in 2013.
Selling by founders and other insiders at private companies – taking advantage of a bubble in valuations in start-ups thought to be close to launching an initial public offering – raises some of the biggest concerns, according to investors.
"Individuals selling before going public is always a bad sign," said Mr Sebastian Thomas, a portfolio manager at Allianz Global Investors. "If you believe in the business, why would you take out money at what is presumably a lower valuation in the private market?"
As the lock-ups which prevented insider sales after their 2012 IPOs expired, executives and directors at companies such as Workday, ServiceNow and Splunk have sold steadily, raising almost $750 million between them over the past 12 months.
Shares in these so-called "software as a service" companies, which sell online access to software applications running in their own data centres, have fallen 30-45 per cent from peaks hit six weeks ago.
"It was a great deal for them – they took advantage of a big run-up," said one tech investor.
Many of the sales were made through pre-arranged stock trading plans that spread disposals over a long period of time, so that corporate insiders have no discretion over the timing of individual transactions. Also, the slump in tech stocks has in many cases only wiped out the gains of the past six months, leaving share prices still above the levels at which insiders were selling for much of last year.
Among the biggest sellers, Jeff Bezos, chief executive of Amazon, raised $351 million in February, taking his total sales to more than $1 billion in just six months – more than three times the amount he had raised in the previous year.
Amazon shares have since fallen back 11 percent, though Mr Bezos' latest sale was still 14 percent below the peak Amazon hit in January.
Sheryl Sandberg, chief operating officer of Facebook, has sold more than half her stake since the company's IPO less than two years ago, benefiting from the steady rise in Facebook's stock since the middle of last year. However, Ms Sandberg, whose disposals were made under a prearranged plan, began her sales when Facebook's stock was at $21.08, well below the $58.53 it ended at last week.
Roughly 11 percent of fundraising rounds for private companies last year included some level of selling by insiders, compared with fewer than 6 per cent three years before, according to research firm PrivCo.
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"The old adage in Silicon Valley used to be that founders didn't get to cash out until all investors got to cash out," said Sam Hamadeh, of PrivCo. Fierce competition among venture capitalists to back the hottest companies has made them more willing to countenance insider sales, he added.
Among insiders to take money out of their companies before going public, early backers of King Digital Entertainment, maker of the Candy Crush Saga game, were paid $504 million in dividends in the months before their company went public. The company's shares ended last week 22 per cent below their March IPO price.
"It's a yellow flag with regard to what's really going on with the company," said Mr Thomas. "It makes you worry what they are trying to sell to investors."
Three executives at Box, a cloud storage company which has posted big losses and raised questions about whether the recent tech stock rally has made it too easy for companies to become public entities, sold $11 million of shares during private financings, according to the company's prospectus.