Did a 10b5-1 Plan Just Rob a Broadcom Executive?

A Fool looks at the filings and finds that a forced sale may have come a bit too soon for one insider.

Jan 22, 2014 at 1:44PM

Given the tax bill they can create, there's rarely a point to exercising employee stock options before they've grown into a multibagger, Fool contributor Tim Beyers says in the following video.

Don't tell that to Broadcom's (NASDAQ:BRCM) Robert Rango, general manager of the company's mobile and wireless group. He filed a Form 4 disclosure on Jan. 2, according to which he sold 19,386 shares at roughly $29.26 a share. Of those, 9,386 were granted via options immediately exercisable at $23.17 per share.

A good but hardly great gain, Tim says. So why rush the sale? Rango didn't have a choice -- he's operating under the purview of a 10b5-1 trading plan that dictates a specific volume and schedule for selling his Broadcom holdings. Too bad, especially when you consider that at the Consumer Electronics Show, Broadcom debuted new systems on a chip that could reward long-term shareholders.

Now it's your turn to weigh in. Where do you see Broadcom stock a year from now? Three years from now? Please watch the video to get Tim's full take and then leave a comment to let us know what you think.

Your advantage over the insiders
Sure, options can bring riches in the short term. And yet if Warren Buffett's record proves one thing, it's that there's no substitute for buying shares in solid businesses and holding for the long term. In the special free report, "3 Stocks That Will Help You Retire Rich," The Motley Fool explores this strategy and shares specific ideas for helping you to build wealth for years to come. Click here to grab your free copy today.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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