Cheesecake Founder Sells as Stock Hits High
By DEBORAH BELGUM
David Overton, the 55-year-old co-founder of Cheesecake Factory Inc., has sold 1 million shares of the Calabasas-based company's common stock for $38.15 million.
The sale marks a pattern of increasing sales by insiders at the popular comfort food chain started by Overton and his parents. The sales come when Cheesecake Factory's stock is at its highest levels in the company's history.
Overton's sale, the largest block of stock he has ever sold, was done for estate planning purposes, said Jane Vallaire, senior manager of investor relations.
Overton sold the stock on April 23 for $38.15 a share to unidentified institutional investors. He exercised options on 370,875 shares, purchased at a cost of about $3.5 million, the same day. The rest of the shares were his since the 1992 initial public offering.
Cheesecake Factory shares closed at $41.67 on May 7.
The sale was Overton's second of the year. On March 14, he exercised options on 20,250 shares at $3.95 per share, according to Securities and Exchange Commission filings. He sold those shares the same day at $33.30 per share, netting more than $594,000.
In late 2001, Overton sold $4.2 million worth of stock, according to data from Thomson Financial. The sales leave Overton with 2.85 million shares, just over 5 percent of the company's stock. "He doesn't have any plans to sell any more stock," Vallaire said.
Other insiders have picked up the pace of their sales as well.
Chief Financial Officer Gerald Dietchle, for example, has sold $4.8 million in stock this year, after selling less than $1 million of stock in 2001. And Debby Zurzolo, the company's senior vice president and general counsel, sold $1.1 million worth of stock this year. She sold $345,000 in stock last year.
In all, insiders have sold $45.6 million in stock so far this year. In 2001, insider sales totaled $8.8 million, according to Thomson Financial.
Despite selling while the shares are on the rise, analyst Hil Davis of Thomas Weisel Partners didn't think Overton expected a decline. "This is a large percentage of his wealth," said Davis, speculating that Overton was "trying to diversify his portfolio."
The stock has risen steadily as the company delivered 18 quarters of positive earnings and grown to 52 Cheesecake Factory restaurants and added two upscale Grand Lux Cafes.
Anthony Palazzo contributed to this story.
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