NEW YORK ( TheStreet) -- Mediacom Communications ( MCCC) is playing hardball with its own CEO, seemingly to the detriment of its shareholders.

Shares of the company plunged on Tuesday after CEO and founder Rocco Commisso announced that he had withdrawn his proposal to take the company private.

That is, withdrawn after his offer was rejected.

Commisso offered $245 million, or $6 per share, for the stock he doesn't already own. He currently owns about 40% of the company's common stock which represents 87% of the shareholder voting power.

A special board committee shot down his offer to purchase the remaining shares of the cable television company and take the company private.

Investors apparently don't share the board's optimism about the company's value. Shares of Mediacom plunged 15% to close at $5.80 on Tuesday, wiping out approximately $71 million in value, after Commisso released a press release concerning his rejected proposal. Its volume is usually around 424,000 shares, but on Tuesday its volume was up to 2.6 million shares as investor moved out.

"I am very disappointed with the highly unusual process and ground rules established by the special committee and its financial and legal advisors to evaluate my proposal," said Commisso, who founded the company in 1995. "I firmly believe that the special committee's decision is not in the best interests of Mediacom's shareholders."

Commisso's $6 per share offering just wasn't enough for the board to accept.

"There was big spread between the bid and the ask," said Laura Martin, an analyst at Needham. "What Rocco was proposing and what the committee wanted was too different."

Mediacom's board was hoping for $9 a share, according to reports from the Wall Street Journal, but Commisso wouldn't go above $7.55.

"It boiled down to price," analyst David Joyce of Miller Tabak explained. "They couldn't agree on anything."

In a June 1 research report, Martin downgraded her rating from a buy to a hold, citing Commisso's offer of $6 a share, which represented a 13% premium at that time.

With a debt of around $3.3 billion, Mediacom's board may have set their sights too high when they asked Commisso for $9 a share. "We believe the deal will get done somewhere between $6.50 and $7 per share." Martin said.

Martin said if the company wants to come to an agreement it should put the issue up to a shareholder vote. By having the special committee make the decisions, the company is taking the rights out of the hands of shareholders.

But as Mediacom senior vice president of corporate finance Calvin Craib explained, "there is nothing to be voted on at the moment."

Commisso has completely withdrawn his offer and made it clear that he is not interested in selling his shares.

Mediacom shares recovered on Wednesday, up around 4% at close to $6.03.

-- Written by Theresa McCabe in Boston.

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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