As eBay's Stock Soared, Insiders Sold

Among the other big insider sellers were two trust funds that sold 2.4 million shares in the first half of the year. Wilmington Trust is the trustee for the funds, but a company representative did not return calls seeking comment about whose stock was held within them. The trust funds' sales were worth an estimated $195 million, according to Vickers.

One portfolio manager, whose fund recently sold off its eBay stake, said the insider sales at the company were never a big concern. The selling seemed pretty predictable as Whitman and others sold at specific times throughout the year, said the portfolio manager, who asked not to be named.

"We felt reasonably good about that not being some sort of bad signal," said the portfolio manager.

The manager's fund exited eBay in recent months out of valuation concerns, the portfolio manager said. eBay is now trading at about 70 times its projected 2003 earnings, not including the cost of stock options.

"It's a great company and a great business model," the portfolio manager said. "The only reason we sold it was that it got so high on our valuation work."

But eBay insiders are likely looking at the same thing in making up their minds to sell the stock, Lutin said. It doesn't take insider knowledge to realize that eBay's stock is overvalued, Lutin said. All it takes is "common sense."

"There's no common-sense foundation for eBay's stock price, other than that some other sucker will pay more for it," Lutin said. "Realistically, if everything went perfectly for eBay over the next 10 years, it still wouldn't be worth what it's trading for today. And the probability that everything will go right for eBay [over that time period] is less than 1%."