Redstone Arm Loads Up on Midway Shares
Sumner Redstone is buying up shares of Midway Games (MWY) again, and -- surprise, surprise -- the stock has rebounded from its months-long slump.
In three consecutive sessions ending on Monday, National Amusements, the theater chain operator that Redstone controls, has bought up a total of 195,500 shares of Midway stock, equal to two-tenths of a percent of Midway's stock. National Amusements bought the shares for between $7.19 and $9.59 each.
Midway's stock, which has an extremely small float because of Redstone's huge stake in the company, jumped with the trades. On Wednesday, when National Amusements filed a report on its latest purchases, Midway's shares were up 64 cents, or 7%, to $10.08 in recent trading. The stock is up a whopping 42% since National Amusements began its latest share buying.
Redstone and National Amusements have been amassing their stake in Midway for years. From September 2003 to December 2005, Redstone's stake -- direct and indirect -- jumped from 29% of the company's outstanding stock to 89%.But the latest purchases mark the first time that Redstone or his affiliates have bought shares of Midway in more than six months. They hadn't purchased any shares since Redstone executed a complicated deal that involved handing over the bulk of his personal stake in Midway -- and a $425 million personal debt -- to a company controlled by National Amusements. Last month, National Amusements paid off the debt. While Redstone and his affiliates abstained from purchasing shares, Midway's stock plunged. The stock fell about 66% between late December and last week. The stock purchases over the last three sessions pushed Redstone's total stake in Midway to 80.2 million shares, or about 87.8% of the current outstanding share count. Midway's stock has largely traded without regard for its financial results. The company has posted years of accumulating losses and poor sales.
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