Egghead execs cash in on gains

Egghead's (EGGS) move to the Net has given its stock some sizzle, and insiders recently have filed to sell some shares in an effort to get a taste of the company's gains.

Egghead shares have jumped 66 percent since the formerly brick-and-mortar software retailer announced in late January that it would move its entire operation to the Internet and conduct business solely through electronic commerce. Egghead closed today at 10-7/8, up a quarter-point from yesterday.

Three Egghead directors and an officer have filed to sell a total of 368,300 shares since the January 28 announcement, according to Securities and Exchange Commission filings. Like many companies, Egghead has designated periods during which insiders are allowed to buy and sell stock.

"This is a company that hasn't had a lot of insider selling historically," said Craig Columbus, an insider trading analyst with Disclosure.

Two of the directors who sold the largest number of shares were former executives and directors of computer and software direct marketer Surplus Direct, which Egghead acquired last year in a $31.5 million stock swap.

Jonathan Brodeur, former president and director of Surplus Direct and now an Egghead board member, filed to sell 160,000 shares in February and March. The shares represented roughly 43 percent of his holdings.

Gregory Boudreau, Surplus Direct founder and an Egghead director, filed in February to sell 200,000 shares, or nearly 12 percent of his stake.

Brian Bender, Egghead chief financial officer, said Brodeur had used some of the proceeds to buy a house and retire some debt associated with his earlier purchase of Surplus Direct stock. He noted also that Boudreau's sale represents only a small portion of his overall holdings.

"This is the first time they've been able to get some liquidity [out of Surplus Direct]," Bender said.

James Kalasky, Egghead's vice president of merchandising, filed in February to sell his entire stake of 800 shares, which had been held in an individual retirement account, Bender said. Kalasky still has 80,000 options that have not yet vested.

Eric Robison, an Egghead director, filed to exercise and sell 7,500 shares in February. He owns no other shares, but has 1,250 options that are vested and 15,000 unvested shares.

Disclosure's Columbus noted that Egghead insiders have tended to sell when the shares trade in the 9-to-10 range.