Netscape chief files to sell 9% of his stake Other executives of software firm seek to lighten holdings

August 14, 1996|By BLOOMBERG BUSINESS NEWS

MOUNTAIN VIEW, Calif. -- Netscape Communications Corp. Chairman James Clark filed to sell 9 percent of his shares as the Internet software company he co-founded faces increased competition that slashed its market value in half.

Clark and several executives filed in July and August to sell a total of 2.73 million shares, according to the Washington Service, which tracks insider transactions. Clark would reap $76.5 million from the sale.

The filings preceded yesterday's release by Microsoft Corp. of a rival Internet browser that threatens Net-scape's 75 percent market share. And they come a year after Netscape's IPO spawned the investor craze for Internet stocks that pushed Clark's stake as high as $1.61 billion. It's now down to $761.4 million and may fall further, analysts said.

"Netscape stock is vulnerable to some more downside," said Rick Berry, an analyst at Murphy, Marseilles, Smith. "People are concerned about Microsoft's formidable competition."

Jennifer O'Mahony, Net-scape spokeswoman, declined to comment on the filings, citing company policy. She did say there are windows of opportunity when the executives can sell, but wasn't more specific.

Netscape shares, which soared to a high of $85.50 on Dec. 5 adjusted for a 2-for-1 stock split, closed yesterday at $40, up $1.75. In their first day of trading on Aug. 9, 1995, Netscape shares more than doubled to $29.13 from a split-adjusted $14, as investors bet that the software company would profit from the rapid increase in American's use of the Internet.

In response to Microsoft's new Explorer 3.0 browser and the company's offer of free access to popular Internet sites, Netscape has sped up work on its own updated browser and is rushing to release the third version of its Navigator 3.0 during the next two weeks.

Netscape dominates the market with more than 38 million users. Microsoft expects that to change in the fall because of Internet Explorer 3.0 and when licensing agreements begin with AT&T Corp., America Online Inc. and CompuServe Corp.

"Netscape stock will remain under pressure," said Manish Shah, editor of the IPO Maven newsletter, "Microsoft is practically giving away their products and their browser."

Meanwhile, Microsoft plans to introduce a new version of its Windows operating system -- the program that controls the basic functions of personal computers -- early next year that features a browser as the main screen and launching pad of every program. That so-called browser interface could make stand-alone browsers redundant.

According to the Washington Service, Clark filed to sell a total of 1.75 million shares over the period from July 26 to Aug. 8. The average price of the shares over the 10-day period was $43.69 a share. As of May 30, he had 18.8 million shares, O'Mahony said. In February, Clark sold 30,000 shares at $54.13 a share, the Washington Service said.

Other executives who filed to sell include Marc Andreessen, vice president and co-founder, who filed to sell 100,000 shares on Aug. 5. As of May 30, Andreessen had 1.6 million Netscape shares, including options.

James Barksdale, president and chief executive, filed to sell 200,000 shares. Barksdale owned 6.46 million shares as of May 30.

John David Barksdale, James' son, filed to sell 100,000 shares.

Mike Homer, vice president of marketing, filed to sell 50,000 shares. Homer owned 626,000 shares as of May 30.

Pub Date: 8/14/96

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