According to an iHeartmedia SEC filing, Liberty Media has sold all 5,941,248 shares of the class A common stock it owned, at a price per share of $25.25, for a total of $150 million. As a result, John Malone’s company no longer owns any shares of iHeartMedia.
Several years ago Malone’s company purchased $600 million of iHeartMedia debt for $490 million. After an iHeart bankruptcy reduced the company debt load, the bonds were converted into about 6.9 million shares.
Another smart investor sees no future in iHeart. The 6 million share sell off is an indictment of iHeart’s eventual goal of evolving (some say devolving) into an AI voiced, stream only “radio” company that generates revenue from its DIY portal and programmatic sales coupled with its wholesale sell off of terrestrial spectrum, real estate and good will. Malone is “saying” the iHeart business model doesn’t have future value.
It does look like Liberty took a hit…unusual for John Malone, but not unprecedented. He either saw no future in the business OR just didn’t want to fight a control battle. I’m sure that the Senior managers at iHeart are relieved this morning….
The bigger story here–now that Liberty Media has lost $340 million–is who bought the shares?
Doubt that there were many individual buyers for OTC I-heart shares, more likely a single entity purchased the block with an eye towards a take-over.
It’s likely more hedge fund guys. When hedge fund guys own a large share of any business, they install their own people at the top and profits along with selling off the profitable pieces of the business are the only thing that matters. That would mean for the employees things are going to get worse, not better.
The purchase price for the stock was $15 a share. They sold for $25. They bought almost 7 million shares 3 years ago. They just sold less than 6 million shares. So they previously sold over a million shares. When they purchased the debt, it was a different deal than buying stock. The stock was sold on the open market, not to another buyer.