Here's How Ethical I Believe I Am

RealNetworks and Microsoft just settled for $761 million--that's Microsoft to RealNetworks--which covers resolving lawsuits and partnering for services. This is fantastic news for Real, which gets the payoff for years of fighting, and Microsoft, which has now settled all of the major domestic lawsuits and government actions against it. This has distracted them, to be sure, and given Google an opening. Microsoft is now the underdog...with tens of billions of dollars in the bank.

Why does this make me ethical? A reporter called to ask me my opinion on this, and I had to decline to comment. About eight years ago, Real bought the assets of Film.com, a company I had helped incubate, and I received a small but very nice chunk of stock for my participation in that. During the Internet heydey, I sold about 2/3rds of that stock paying, among other things, for a new roof for my house.

The remaining stock is Section 144 insider stock which means I have to file about 1 inch of paperwork for it. I've sat on the small number of shares that remain because there was only a little upside versus what I thought might happen if Real resolved its Microsoft difficulties. When Real retained money in the bank turning profits, I had to think Microsoft now knows it can't simply outlast the company which is making money in spite of what it's spending on lawyers. (A commenter pointed out that Real has had little GAAP profit; nonetheless, they have increased shareholder equity while only very slowly tapping cash reserves over the last three years.)

It would be wrong of me holding insider stocks with a material benefit of literally hundreds of dollars--no typo--to comment on it even though I never worked for Real.