A number of senior Compaq executives, including chairman Ben Rosen weeks before it posted a profit warning. and senior VP of Europe Andreas Barth, sold a tranche of shares, only weeks before the manufacturer issued a profit warning.
Citing stuffed inventories and US commercial pressures, Compaq shocked industry watchers and shareholders in March by saying it expected to only break even in the first quarter, disappointing analysts who expected earnings of $500 million (PC Dealer, 11 March).
Among the senior executives were Robert Stearns, senior VP of technology, Michael Winkler, senior VP of PC products and Robert Schrock, VP of consumer products as well as Rosen and Barth.
The group sold shares priced between $30.56 to $36 per share in February, registering the disposals with the US Securities and Exchange Commission (SEC), as demanded by tight US law. By mid March, Compaq's share price fell to under $24, rising slightly to $25.56 earlier this week.
A Compaq US representative said: 'This happens every quarter with people buying, selling and exercising options. The SEC is strict about material knowledge and no one in Compaq would do anything untoward.'
'We didn't have the figures for north American sales at that time, and markets move quickly,' he said.
Following Compaq's profit warning, there had been speculation that the UK channel would see similar inventory problems arise as its US counterpart. A representative commented: 'As regards European prospects, we are still in the quiet, pre-reporting period, but I can say we are still confident.'
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