Sumner Redstone’s goal of becoming the majority shareholder in Midway Games Inc. (MWY) was achieved last week when his holdings, through market purchases, reached 59% of the company’s total outstanding stock.
Yet, while Redstone, the chairman of Viacom, Inc., was accumulating Midway shares, the company’s chairman, Neil Nicastro, continued selling his holdings. Last week, he dumped more than 307,000 shares at prices ranging between $9.30 and $9.40 apiece. This raised the amount of shares he has peddled to more than 800,000 shares generating proceeds of just under $7.5 million.
Also selling last week David F. Zucker, company president and CEO. He acquired 350,000 MWY shares at prices that ranged from $2.982 to $3.57 each and sold them off at slightly more than $9 a share.
Because of the stir created by the large stock sales, Zucker, issued a statement that tried to reassure scared shareholders who were tempted to follow his and Nicastro’s example.
In the statement, Zucker wrote: "Some stockholders have expressed concern regarding my recently reported sales of Midway common stock. These sales were related to the payment of taxes on restricted shares, the payment of taxes and exercise prices on my stock options and the payment of certain unusual personal expenses associated with the purchase of real estate. In fact, the large majority of my potential net worth is tied up in my remaining Midway holdings. I have complete confidence in Midway’s future and I do not intend to sell any Midway stock for the next several years."
Analysts said that the rise of more than 140% in the stock’s price was due almost entirely to Redstone’s efforts to own a majority of the outstanding shares.