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ExactTarget's stock price falls as insiders unload shares

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ExactTarget Inc.'s stock price fell more than 7 percent Tuesday after company insiders shed more than 7.5 million shares of the Indianapolis-based marketing software firm.

The stock dropped to as low as $21.80 per share during the day before closing at $23.07, a drop of 7.2 percent from Monday's closing price.

The selloff follows the expiration Monday of ExactTarget’s lock-up agreement, a ban that prohibit insiders from selling their shares for a period of time after a company goes public.

Indianapolis-based ExactTarget went public in March at $19 a share, raising $161.5 million. The stock soared to a first-day close of $25.11 and hit a low of $18.53 in early June.

Palo Alto, Calif.-based Technology Crossover Ventures and Boston-based Battery Ventures, two of ExactTarget’s largest stockholders, are responsible for shedding almost three-quarters of the shares unloaded as part of a follow-on offering announced Sept. 11.

Technology Crossover Ventures sold nearly 3.3 million shares, taking its ownership stake in the company down to 17 percent, while Battery Ventures sold more than 2.2 million shares, leaving it with an 11.4-percent ownership stake.

Foster City, Calif.-based Scale Venture Partners unloaded about 900,500 shares, leaving it  with a 4.7-percent stake.

ExactTarget CEO Scott Dorsey sold 300,000 shares, taking his ownership stake from 3.6 percent to 3.1 percent.

The 7.5 million shares unloaded by insiders will be priced in a follow-on public offering at $22.50 each, the company announced Sept. 11.

So-called lock-up agreements ensure insiders and early investors don’t dump their holdings during an IPO. The restriction on stock sales typically lasts up to 180 days. Some experts say tech stocks are especially vulnerable to lock-up expirations because many issue a smaller percentage of their stock during the IPO than other companies. Many tech stocks also have higher valuations than non-tech stocks relative to cash flow and other key measures, critics complain.

“The price of our common stock could decline if there are substantial sales of our common stock” by insiders, ExactTarget said in its registration. “We have a small public float relative to the total number of shares of our common stock that are issued and outstanding.”

Trading of Exact Target’s stock was heavy Tuesday morning, as nearly 2 million shares changed hands. By comparison, volume on Monday reached only 226,300 shares.

 
 

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  • Remember:
    ExactTarget CEO Scott Dorsey sold 300,000 shares, taking his ownership stake from 3.6 percent to 3.1 percent.

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  1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

  2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

  3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

  4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim

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