Insider Selling at Michael Kors Holdings Ltd (KORS) Hurts Investors: News Corp (NWSA), Google Inc (GOOG)

The precedent
The other things that have to be running through shareholders’ minds are the countless times it didn’t work out. In the news this week is the case of Mark Cuban, owner of the Dallas Mavericks NBA team who’s being accused of dumping shares in an Internet search company as it went under. He saved his own skin and let the rest of the world burn. There’s also the classic Martha Stewart sale of a drug company. She managed to save herself about $45,000.

While big sales from insiders don’t mean that something’s amiss, it’s hard to imagine that they mean everything is awesome. In his defense, a lot of insiders have been selling recently. Larry Page sold off another $65 million, and Rupert Murdoch unloaded $40 million of his shares in News Corp (NASDAQ:NWSA), according to Bloomberg. Maybe we’re just in that time of year when people need a bit of extra cash for a few houses or for their charities.

The bottom line
Compounding the frustration is big sales by other insiders. CEO John Idol has been getting out of the game as well. He’s sold $400 million worth of stock since the IPO. That doesn’t reek of faith in the long-term success of the company.

I think it’s right that investors are worried and more than a little upset. Kors’ sale has probably cost them money. and it makes everyone fearful of what’s coming around the bend. If there’s one person who knows what’s next, it’s the man the company is named for. If he’s concerned enough to sell, why shouldn’t we all be selling?

The article Insider Selling at Michael Kors Hurts Investors originally appeared on Fool.com and is written by Andrew Marder.

Fool contributor Andrew Marder has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Google.

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