Real Life Prediction Markets

When looking at companies' strategies, armchair generals (and all too many bloggers) look at the CEO's speeches, PR bumph and mission statements (usually confusing it with actual intent). Professionals looks at what they actually DO - and one of the things they watch is the buying or selling of shares by senior execs.. And guess what - when senior execs cash in a lot of shares at once, its not usually good news. Its like a real time, real life Prediction Market - dumped shares now = bad news later.

So, news today that the new Yahoo CEO and some of the management have dumped a considerable part of their wad is a bit worrying - Grauniad:

Investors are questioning the long-term loyalty of Carol Bartz, who was parachuted in to run Yahoo nine months ago, after it emerged that she and her team of top executives have sold millions of dollars in stock while the internet search engine struggles to turn around its ailing business.

According to regulatory filings, Bartz has made two major stock sales in the past nine months – more than $830,000 (£500,000) in March and a further $1.14m in June.

The 61-year-old former boss of the software company AutoDesk, who also receives a salary of $1m and is eligible for an annual bonus worth up to $4m, was granted options on 5m shares of Yahoo stock when she took the top job at the beginning of the year.

The news does not fit with the image she has tried to portray since taking over at the company earlier this year, hired as a pragmatic and efficient replacement for Yahoo's co-founder, Jerry Yang.

We would guess she probably is very pragmatic and efficient, and that trousering the cash now is a rational act - which is why investors are worried

Veni, Vidi, Vendi.......