Case sold 15.34 percent of his stake in the online giant on February 25--when the stock traded between 118 and 121-15/16--just two days after the company hit an all-time high of $125 per share.
This most recent shedding reduced Case's stake to 2.76 million shares, down from 3.26 million, according to AOL spokeswoman Tricia Primrose, who noted that much of the company's executive compensation is based on stock options.
"Our executives routinely sell stock for personal financial planning," said Primrose, adding that the sale was unrelated to a restructuring at AOL--announced days before Case's sale--that promoted executive Robert Pittman to president and chief operating officer, solidifying his position as No. 2 behind Case.
Insider stock sales are a fuzzy measurement of a company's internal operations, said Greg Vogel, an analyst with NationsBanc Montgomery Securities. "Insiders know things about the state of the company that regular investors don't know about, and that makes people nervous," he added. "From that perspective, it is something that people watch" and if it can't be explained away investors may question why management thinks it is a good time to sell.
Primrose said that once each quarter, around the time when the company reports its earnings, there is a window of about three weeks during which time insiders are allowed to sell their shares. Case sold 100,000 in December and 150,000 shares in September during the two most recent windows.
Insiders typically try to sell the same amount of shares during each window, regardless of whether the stock is up or down, so that no one can accuse them of selling on inside news, noted Vogel. Regardless of the regularity of the sales, though, it is not unusual for investors to question the reasoning behind them.
"Is the stock near a top? Why doesn't management think it is going to $200 a share?" he asked rhetorically. "Investors think that either the stock is overvalued and it is a good time to sell, or maybe Case needs capital for something else, or maybe he is no longer interested [in running AOL], which I doubt."
Case's next largest sale of company stock took place in May 1996, when he sold 200,000 shares for $53.01 per share.
AOL stock closed at 117-1/8 today, down 1/2 from yesterday's close of 117-5/8.