SiliconBeat

EBay Chief Executive Meg Whitman has returned to the ranks of the company’s inside sellers this year for the first time since 2003, according to Thomson Financial.

Her latest trades took place at the height of the recent stock market gyrations on Aug. 9, a day the Dow dropped 387 points, or 2.8 percent on credit worries, and Aug. 10, the day the Federal Reserve injected billions of dollars of extra liquidity into the financial system, helping cut the Dow’s loss that day to 31 points, or 0.2 percent.

Whitman exercised options to buy 320,000 shares of eBay stock at $10.02 per share both days and then sold them at prices ranging from $35.63 to $36.75. The trades left her with a profit of $16.75 million.

Good timing or bad?
Well, no timing, really. Or so we’re left to conclude, as the shares were part of a 10b5-1 trading plan set up by Whitman in February and announced in footnotes to the company’s proxy dated April 30.
10b5-1 trading plans allow executives to sell a specific number of shares over a predetermined amount of time. For instance, Whitman’s most recent plan allows her to sell up to 6.4 million shares between June 2007 and February 2008. So far she has sold 1.3 million of those shares, or 20 percent.

But the nitty-gritty details of such plans _ such as exactly how many shares are sold on what date and at what price, or even whether they need to be sold at all _ can vary widely and are rarely disclosed.

For example, in February 2006 Whitman set up a plan to sell an untold number of shares. Perhaps she felt the time was right to sell some of the more than 30 million eBay shares she controls as the stock price had fallen 26 percent the year before, its first yearly drop since the bubble popped for Internet stocks in 2000.

But 2006 turned out to be even worse as eBay shares fell another 30 percent. Whitman ended up not trading any shares under her plan that year, so clearly the timing of the proposed sales were not set in stone.

Jose Mallabo, a spoke sperson for eBay, assures us that Whitman remains committed to the company and that her sales are simply a part of her personal asset management. Shares of eBay are beating the markets this year. They closed Thursday at $33.51, up 11.4 for the year, compared to 6 percent rises in both the Dow and Nasdaq.