Google’s Schmidt To Sell $2.5 Billion Worth Of Stock

On Friday Google filed an “8-K” form with the US Securities and Exchange Commission, which indicated that over the course of the coming year, Google Executive Chairman Eric Schmidt will sell roughly 42 percent of his outstanding shares in the company.

According to the filing:

As of December 31, 2012, Eric beneficially owned approximately 7.6 million shares of Class A and Class B common stock, which represented approximately 2.3% of Google’s outstanding capital stock and approximately 8.2% of the voting power of Google’s outstanding capital stock.

Under the terms of this trading plan, Eric intends to sell up to approximately 3.2 million shares of Class A common stock. If, during the one-year period for which this trading plan is effective, Google declares and pays a dividend of one share of Class C capital stock for each share of Class A common stock and Class B common stock then outstanding, then a number of shares of Class C capital stock equivalent to the number of shares of Class A common stock subsequently sold, will also be sold under the trading plan.

On a pro forma basis as of December 31, 2012, assuming all shares of Class A common stock (and excluding the shares of Class C capital stock to be issued pursuant to the dividend) had been sold under the trading plan, Eric would have owned approximately 4.4 million shares, which would have represented as of such date approximately 1.3% of Google’s outstanding capital stock and approximately 5.0% of the voting power of Google’s outstanding capital stock.

Google’s stock is currently trading at $785.37. At that price, the full stock sale would be worth $2.51 billion. Google’s Page and Brin have also pursued this sort of measured sale of stock in the past.

The plan’s intention is to minimize the “market impact” of the sale. Often, when high-ranking insiders sell their shares, investors see it as a sign that something is wrong or that the stock may decline in the future. This kind of very public, structured approach is intended to avoid that perception.

This filing has also triggered some speculation about Schmidt’s future plans and whether he may leave Google in the near term. He recently wrote a book, took a private trip to North Korea with former Governor Bill Richardson and has often been mentioned as a potential US diplomatic appointee.