Michael Malone, managing director at iiNet, has sold $13.2 million worth of shares in the company.
The founder of iiNet sold 4 million shares through Perth Internet, reducing his share in the company from 11.9 per cent to 8.72 per cent. He still owns 14,012,162 shares worth $50.4 million, based on iiNet’s trading price of $3.60.
Paul Budde, telecommunications analyst at BuddeComm, told Computerworld Australia the selldown is a significant amount and is an indication Malone is just “reaping some of the fruits of his hard work”.
While he said the sale comes as a surprise, Budde said it is a reflection of the changing nature of iiNet.
“The company is now significantly larger – it doesn’t only rely on him anymore. I think the whole scene of iiNet has changed from a small entrepreneurial company to a very large, significant national operation,” Budde said.
“I think the nature of the beast has changed and that might also be part of the reason why he’s selling some of his shares.”
Budde said the selldown is an indication of the broader management system now in place at iiNet.
“The company is now much larger than Michael Malone himself and there is now a totally different management system in place,” he said. “While Michael’s role [is] as the original starter of the whole project and the passion behind it, he’s still critically important. At the same time, it wouldn’t make sense if the company were completely relying on him for its future position.”
Perth Internet was iiNet's largest shareholder at 21 June, 2012, with National Nominees (10.81 per cent shareholding) second and JP Morgan Nominees (10.69 per cent) third.
iiNet recently posted a 19 per cent increase in revenue for its FY2012 results to $831 million, with recent acquisitions of Internode and TransACT driving top-line growth and an increase in iiNet’s broadband market share to around 15 per cent. This compares to revenue five years ago in FY2007 of $239 million.
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