Regulatory filings indicate that Robbie Bach, president of Microsoft’s Entertainment and Devices division, has sold $6.2 million worth of company stock since May, a period during which mounting Xbox 360 technical problems have come to light. Market Watch reports that filings lodged with the Securities and Exchange Commission show Bach sold $6.2 million in stock between May 2 and last Thursday when Microsoft officially acknowledged it would be necessary to fork out around $1.15 billion to cater for an "unacceptable" number of Xbox repairs. Bach had sold no stock for eight months prior to May.
Microsoft also announced last Thursday that it had missed its shipping target of 12 million Xbox 360s, the figure coming in at 11.6 million units for the fiscal year ended June 30, 2007.
While corporate executives often partake in scheduled selling plans to ensure they aren’t perceived to be using insider information to sell stock for personal benefit, the report indicates that Bach's insider sales were not done according to a scheduled plan.
While Bach was unavailable for comment, Microsoft spokesman Eric Hollreiser commented on his behalf.
"Robbie Bach's past trading is completely unrelated to last week's announcement. ... [He] continues to hold a significant stake in Microsoft and remains confident in the long-term success of the company."
Hollreiser went on to say that while Microsoft may have been aware about growing Xbox problems for a matter of months, a financial decision on how to solve the company’s woes was taken "much more recently."
Both admissions by Microsoft did relatively little to affect the company’s shares, which dropped in heavy after-hours trading Thursday to $29.88, and fell only slightly to $29.32 by the end of trading Tuesday. They were up marginally in Wednesday trading to $29.62.
UPDATE: Microsoft's Xbox Exec Sold Stock As Problems Surfaced
By John Letzing
SAN FRANCISCO (Dow Jones) -- The Microsoft Corp. executive in charge of the Xbox video-game console sold $6.2 million worth of company stock during a period when technical issues with the product were becoming a major concern, according to regulatory filings.
Microsoft said Thursday that it will take a charge of up to $1.15 billion to its fourth-quarter earnings to address what it called an "unacceptable" number of Xbox repairs.
"In the last couple of months, we started to see significant increases in repair requests ... and significant attention from people," Robbie Bach, president of the entertainment and devices unit that includes the Xbox, said during a conference call with analysts at the time. "So we geared up to respond to that."
According to a review of filings with the Securities and Exchange Commission, Bach sold $6.2 million in stock in the period between May 2 and Thursday's announcement. That followed an eight-month period when he sold no company shares, according to filings.
Microsoft shares were little affected by the Xbox announcement, dropping in heavy after-hours trading Thursday to $29.88, and falling only slightly to $ 29.32 by the end of trading Tuesday. The shares were up slightly to $29.62 in Wednesday trading.
Bach's most recent insider sales came between May 25 and May 30, according to filings.
Bach was not available to comment. Microsoft spokesman Eric Hollreiser said that "Robbie Bach's past trading is completely unrelated to last week's announcement. ... [He] continues to hold a significant stake in Microsoft and remains confident in the long-term success of the company."
The spokesman added that while Microsoft may have known about mounting Xbox problems for some months, a decision on how to deal with them financially was reached "much more recently."
On Thursday last week, Microsoft identified a specific problem that had come to be commonly known among gamers as the "Red Ring of Death" -- a hardware failure marked by the flashing of three red lights on an Xbox.
Microsoft (MSFT) said that it will reimburse Xbox customers who have paid for repairs resulting from the failure, and the company expanded its warranty program for machines experiencing the failure from one year to three years.
Along with news of the technical failure, Microsoft also announced that it came in shy of prior estimates of Xbox sales, with 11.6 million sold by the end of June. The company said in January that it expected to sell 12 million consoles by the end of June.
Gates, others sell
In the roughly two months before to last week's announcement, Bach ranked third in insider-share sales, behind general counsel Brad Smith, and well behind chairman and co-founder Bill Gates, consistently a top insider selling stock. Hollreiser said that Smith's sales were of company stock options, and that he used proceeds to make further purchases of Microsoft shares.
Corporate executives are often enrolled in scheduled selling plans to insulate them from the perception that stock sales may be related to insider information. Bach's insider sales during the roughly two-month period prior to the Xbox failure announcement, however, were not done according to a scheduled plan, filings indicate.
Ben Silverman, director of research at Indie Research, a firm that tracks insider sales for investors, said that insider sales at unfortunate times often occur by chance. "It doesn't necessarily mean [insiders] think that there will be a bad event; it could just be financial planning. But sometimes it just looks bad that an insider has sold stock.
"I'd give [Bach] the benefit of the doubt here, especially because the stock didn't move very much" after last week's announcement, Silverman commented.
While the Xbox announcement hardly affected Microsoft's share price, it did strike a sour note with some analysts.
A.G. Edwards analyst Kevin Buttigieg wrote in a note last Friday that while Microsoft "portrayed the Xbox's technical and financial problems as essentially in the past ... Xbox 360's image may still suffer in the eyes of consumers."
Buttigieg said that Microsoft still expects its Xbox business to become profitable sometime during fiscal 2008. "But with continuing issues with the Xbox, we think [Microsoft] will be challenged to attain its profitability goals."
Microsoft is due to report fourth-quarter earnings July 19.
Bach said last week that Microsoft already has developed a technology fix for the red-light failure, which is being implemented in some inventory and in Xbox consoles now in production.
(END) Dow Jones Newswires
07-11-071818ET
Copyright (c) 2007 Dow Jones & Company, Inc.
Robert J. Bach, commonly known as Robbie Bach, is the President of Entertainment & Devices Division at Microsoft. He leads the division that is responsible for the Xbox, Xbox 360, Zune, Windows Games, Windows Mobile and the Microsoft TV platform.
Contents [hide]
1 Biography
2 Microsoft Career
2.1 Microsoft Office
2.2 Microsoft Europe
2.3 Chief Xbox Officer
2.4 Zune
3 Microsoft Titles
4 Boys and Girls Club
5 External links
[edit] Biography
Robbie Bach was born in Peoria, Ill on December 31, 1961 and is the son of a former Schlitz Brewing executive. A gifted scholar/athlete, he played competitive tennis at Chapel Hill, where he was a Morehead Scholar and lived in the same dorm as Michael Jordan. After graduating from UNC with a degree in economics, he worked at Morgan Stanley before going on to receive an MBA from Stanford. He joined Microsoft in 1988 and has been with them ever since. He is married with 3 children and comes from a tremendously athletic family: brother Tom ran track at Northwestern and was an All-American; brother Peter played tennis at USC; nephew Justin played tennis for UVA; A nephew played baseball at Wake Forest and currently works for Microsoft in New York City; and another nephew currently plays football for Furman. He most recently was profiled in the SF Chronicle where he discussed the Microsoft ZUNE and its prospects in the digital music space going forward.
[edit] Microsoft Career
Robbie Bach has overseen some of Microsoft's most successful projects.
[edit] Microsoft Office
As the top marketing executive in charge of Microsoft Office during the 1990s Bach battled against Corel and Lotus when they had 80% market share to Microsoft's 20%. Microsoft Office suite is now Microsoft's second most profitable product suite garnering billions in revenue.
[edit] Microsoft Europe
From 1990 to 1992, Bach served as the business operations manager for Microsoft Europe, reporting to the president of Microsoft Europe in Paris, where he coordinated business planning and strategy, budgeting, and special projects. He helped unify Microsoft's once-divided European local units.
[edit] Chief Xbox Officer
Bach was the top executive in charge of Microsoft's gaming consoles Xbox and Xbox 360. Under Bach's leadership Xbox passed Nintendo's GameCube as the #2 gaming platform.
[edit] Zune
Bach is now leading the charge against Apple Computer's iPod with Microsoft's Zune. 作者: aden111 时间: 2007-7-13 13:21
