Lions Gate Vice Chair Forced to Sell Shares
CNBC Media and Entertainment Reporter
Carl Icahn's recent increased investment in Lionsgate shares isn't the only news resulting from the company's low stock price. On October 10 the stock dipped below $6, triggering a margin call by Merrill Lynch for Vice Chairman Michael Burns, selling 672,000 shares of his stock, 49 percent of his stake in the company, recorded in a Form 4 filed on October 14. Now Burns has just under 700,000 shares of the company.
A company spokesperson explained that Burns had pledged the shares, years ago as collateral in a personal structured real estate loan. He reiterating that this was not Burns' decision to sell these shares. The natural comparison is to Sumner Redstone's National Amusements theater chain having to sell $233 million worth of Viacom and CBS shares to cover a loan.
The company's statement: "The sale was a margin call by Merrill Lynch , a forced sale, not done by Michael Burns' direction. Burns continues to hold nearly 700,000 shares of Lions Gate stock." Will Burns jump back in with the stock trading so low? Because of a short-swing rule Burns won't be able to buy back any shares for 30 days. The spokesperson also pointed out that neither Burns nor any other executive interested in investing in the company could buy in right now-- the company is in a quiet period until November 12, after its quarterly earnings report.
When an executive sells shares of their own company it never looks good, but Lionsgate must be pleased that at least the price dip that triggered this sale, also attracted a significant investment by Icahn.
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