"This is the first time in quiet a while that some of the luster is off the stock and to see an insider selling now, it adds to the uncertainty," said Craig Columbus, an analyst with Disclosure.
He added that the issue with Dell's sales is not so much the number of shares but the timing of the sale.
"When a stock is growing by great leaps and bounds, insider selling is considered profit taking. But since Dell's quarterly earnings report, the stock has been trading sideways--which may be a bit disconcerting for Dell investors," Columbus said.
Dell's CEO has sold 12.7 million shares to date in 1998, on a split-adjusted basis. That's in the range of some previous sales, when accounting for stock splits. Last year he sold 5.9 million shares, and 18.5 million in the previous year, said Bob Gabele, editor of the Insider's Chronicle and president of CDA/Investnet.
Gabele, however, said he does not consider the company founder to be a market timer.
"He's not a market timer, but other insiders are. Usually it's midlevel executives or employees who are lower down on the ranks that are market timers," said Gabele.
T.R. Reid, a company spokesman, said Dell sells a small percentage of his holdings each quarter as part of a planned diversification program.
Dell currently holds roughly 200 million shares, Reid said. And as part of the company's policy, insiders are not allowed to trade in the six to seven weeks before quarterly results are announced. They can resume trading following the third trading day after the earnings report is released.
"People looking for deep meaning in the trades done by Michael and other executives don't know our company well. Their volume is usually small to their total holdings, and it's done in a planned and consistent fashion," Reid said.