Watching their shares fall over the past year, Netscape Communications (NSCP) chief executive James Barksdale and chairman James Clark are cutting their losses and cutting their respective stakes in the troubled Internet company that once dominated Web software.
Clark, who last year held an 18.1 percent stake, or 15.9 million shares, in the company he founded, has cut his stake to 15.5 percent or 15.2 million shares.
Barksdale, during the course of the last year, has reduced his holdings to a 4.9 percent stake in the company with 4.8 million shares, according to a Monday filing with the Securities and Exchange Commission. That compares with the 5.8 percent stake, or 5.1 million shares, he held as of last February.
The CEO, who last year announced that he would forgo any salary, has seen his paper wealth decline steadily during the past 12 months. Netscape shares have lost more than half their value since late July, when they traded at near 50 a share.
Netscape shares closed at 21 today, up 1/4 over yesterday.
Under the terms of his employment contract, Barksdale received 8 million shares, of which he was immediately able to vest half. He soon received an additional 400,000 shares that he also was able to vest.
He can vest the remaining shares at a rate of 80,000 shares a month, which means that Barksdale will not become fully vested until early 1999. Netscape employees, on the other hand, will begin to become fully vested in April, but the company does not anticipate employees will flee the company once they are able to cash in their stock options. A company spokeswoman said that approximately 100 employees or less will fully vest by the end of this year.
Netscape shares jumped more than 30 percent during the past two weeks, from around 16 a share to as high as 21 a share, as rumors circulated that America Online, Sun Microsystems, Oracle, and IBM might be interested in buying the company. Oracle president Ray Lane denied any such interest, according to a report in Rhode Island's Providence Journal-Bulletin, and a source familiar with AOL said no discussions about the matter were under way.
Despite its brief upswing of late, Netscape posted a larger-than-expected loss last month, announcing at the same time that it would lay off 300 workers. The company cited sluggish sales of its server software and also of its standalone browser as factors that contributed to the weak earnings report.