Three directors of PartyGaming decided to cash in some of their share holdings for a total of £5.5m just a month after the company's four founders sold a 5 per cent stake in the business.
The news pushed the online poker giant's shares down 3.5 per cent to 112p yesterday as other investors followed suit.
PartyGaming announced that Michael Jackson, the chairman, Martin Weigold, the finance director, and David Abdoo, the company secretary, had sold a total 4.5 million shares at 116p apiece the previous day.
The sales come two weeks before the company issues its second-quarter trading update.
Mr Jackson raised £304,000 and was left with 600,000 shares. Mr Weigold and Mr Abdoo offloaded all of their holdings and raised £3.2m and £1.98m respectively. They received their shares free at the flotation in June last year while Mr Jackson bought his shares. As the departing chairman of Sage, he also sold 100,000 shares in that company at 236p on Tuesday.
A spokesman for the company said Mr Jackson sold shares to cover his tax liabilities while the other two directors wanted to diversify their portfolios. He pointed out that Mr Weigold is due to receive 9.5 million share options, which vest on a quarterly basis, until the end of 2009 while Mr Abdoo is also in line for a "substantial" number of options. "It's very much still in their interest to drive the business forward," the spokesman said.
Despite the news, Panmure Gordon advised investors to buy the stock and stuck to its 225p price target.
The four founders - Anurag Dikshit, Vikrant Bhargava, Ruth Parasol and her husband, Russell DeLeon - caused controversy a month ago when they sold 200 million of shares before the official lock-up period expired at the end of June. However, the share placing was poorly received and the company's broker, Dresdner Kleinwort Wasserstein, was forced to scale back the sale from the planned 350 million shares.Reuse content