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Technology Stocks : Metromedia International Group (MMG) Looking for Opinions
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To: TheSlowLane who wrote (197)10/16/1998 8:15:00 PM
From: killybegs  Read Replies (1) of 353
 
A trust affiliated with Kluge filed a 13 d last week on the purchase of 200,000 shares of the MMG preferred at 24.50 to 25.50 per share from 9/4 thru 9/21. With 200 million in cash at the end of the June qtr and small long term debt, the preferred is a great value. Selling at over a 50% discount to par value, converts to 3.33 shares of common and has a current yield of 19%. I expect the company or buyers close to the company to accumulate shares. After all, why not retire $50 of par value for $20 or 25 dollars. Kluge and mgmt own 26% of the equity. Buying the preferred in the open market makes sense for the company to do at some point.
Three ways to win here....
1. Company buys preferred in the open market or tenders for shares at a premium to present but under liquidation value.

2. Things settle down preferred trades to a 12% yield or a $30 dollar stock price.

3. Common recovers .. at $10, the preferred would be worth 33.33 per share of common alone.

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