Charles Kaiser has an interesting item on the Portfolio.com site that despite the dramatic increase in Dow Jones & Co. stock due to the $60-a-share offer from News Corp. CEO Rupert Murdoch to buy the owner of The Wall Street Journal, few journalists there are selling their stock.
Kaiser wrote, “For one thing, Dow Jones has very strict conflict of interest rules — and they prohibited anyone involved in the coverage of Murdoch’s takeover attempt from either exercising their Dow Jones stock options or selling any of their Dow Jones stock. That group includes all of the editors on the masthead — the ones most likely to have the largest number of options, or the greatest numbers of shares.
“Another limiting factor — even for those not involved in the coverage — is the fact that Dow Jones stock options don’t vest for three years. So only those options granted before 2005 could be exercised right now.
“‘I have some options which are not in the money,’ said Jim Browning, a Wall Street Journal reporter and union activist, ‘and if you look at the history of the stock, even at $60, it’s not a huge gain.’
“That’s because as recently as January, 2004, the stock was trading in the low 50s — so even if employees had bought 200 shares at a 15 percent discount (which every employee is entitled to do every year) — depending on when they made their purchases, their profits would not be gigantic.”
Read more here.
