Gateway founder drops stake by 15 percent

Ted Waitt has pared down his stake in the PC maker this year--a contrast to the previous four years, when he sold no shares.

Dawn Kawamoto Former Staff writer, CNET News
Dawn Kawamoto covered enterprise security and financial news relating to technology for CNET News.
Dawn Kawamoto
2 min read
Gateway founder Ted Waitt has been busy paring down his stake in the computer maker this year--a marked contrast to the previous four years.

Waitt, who resigned from Gateway's board last May, has registered this year to sell more than 16 million shares with an estimated value of more than $58 million through his investment group, family foundation and trusts.

A Waitt Family Foundation executive said that the Gateway founder has sold shares in the company at various times for many years but took a hiatus during the time he was trying to institute a turnaround.

"As chairman and CEO of Gateway, he sold shares at periodic intervals for years. He has diversified his assets for quite some time, and sales of GTW stock have been part of that plan," John Heubusch, president of the Waitt Family Foundation, said via e-mail. "He took time off from any stock sales during the 2001-2004 time frame because he was in the middle of engineering the company's turnaround and was wasn't interested in selling. He's no longer affiliated with the company in any official capacity."

Though it's not unusual for company founders to seek diversification in their portfolio, it wasn't until this past February that Waitt enacted a regular schedule to sell portions of his Gateway stock. Up until this year, Waitt and his related entities had not sold any Gateway shares since 2000, other than to issue gifts of Gateway stock, said Jaseem Hasib, an insider trading research analyst with Thomson Financial.

Waitt's stake in the company has fallen roughly 15 percent to 90.2 million shares since Gateway filed its annual proxy in March, according to filings with the Securities and Exchange Commission. He still remains, however, the largest single shareholder with a 28.3 percent stake, according to SEC filings.

"This is the first indication of a lot of selling from Ted Waitt," said Hasib. "It's more indicative of a company that is moving away from his views of how to shape the company."

Last year, Gateway announced Waitt would hand off the chief executive post to Wayne Inouye, former eMachines CEO, as part of the acquisition of that company. Fourteen months after the deal closed, Waitt resigned from Gateway's board to pursue business and philanthropic interests.

For Waitt, it's not the first time he has engaged in selling shares when he no longer ran the company. Back in 1999, when he stepped down as CEO and Jeff Weitzen was promoted from his president's post to the chief spot, Waitt sold approximately 6.7 million shares with a value of $2.4 billion, Hasib said. Waitt later went on to sell 9.9 million shares for a value of $564 million in 2000, Hasib added.

In the two years prior to giving up the CEO post to Weitzen and in the subsequent four years after he returned as CEO, Waitt and his related entities did not sell shares, Hasib said.