NEW YORK (TheStreet) -- Microsoft(MSFT) CEO Steve Ballmer and Chairman Bill Gates faced frustrated shareholders at the tech giant's shareholder meeting on Tuesday, and recent insider selling by the Microsoft executives was front-and-center among Microsoft investor gripes.
Investors read into the heavy insider selling a signal that stocks are overheated, and company executives were signaling that their shares are due for a haircut. Given the action in the markets on Tuesday, with all three major market indexes back to August levels, the heavy insider selling in early November -- when many stocks were at multi-year highs -- now seems prescient, if not just lucky timing. >>Top 10 S&P 500 Insider Sales of 2010 Microsoft is the largest insider seller among the S&P 500 universe of companies this year, and it's been that way for several years running, so it's not a surprise for shareholders to see the insider activity. It was when Ballmer announced he would sell up to 75 million shares before the end of 2010 that the spotlight was focused back on Microsoft insider selling. On Nov. 4, Ballmer sold 49.3 million shares, or 12% of his shares, at a value of roughly $1.3 billion, according to inside sales watchdog Insiderscore.com. On Nov. 12, Ballmer sold 3.2 million shares, or just under another 1% of his Microsoft shares, at a value of roughly $84 million. The selling still leaves Ballmer with 22 million to 23 million shares left to sell to reach his 75 million insider sales target before year-end. Gates sells 20 million shares every quarter as part of his foundation funding, and Gates' insider selling alone makes sure that Microsoft is among the biggest insider sellers among S&P 500 companies year in and year out. Ballmer, on the other hand, has not been a seller of Microsoft shares since 2003. Investors at the Microsoft annual meeting on Tuesday zeroed in on the Gates and Ballmer insider sales as a way to vent their frustration over the lack of growth in Microsoft shares. Over the past three years, Microsoft shares have traded as low as $21 and as high as $37. Year-to-date, Microsoft shares have traded as high as $31 and as low as $23. Meanwhile, Apple(AAPL) adds a cool $90 to its share price this year. By displacing frustration over the lack of pop in Microsoft shares through the insider sales issues, it can be argued that Microsoft shareholders are making an ironic error. Vote Now on the Microsoft Outlook Microsoft: Buy or Sell? 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