Where does MSGI go from here?
Well, in a virtual dreamland, if I was CFO, once the private placement had been crossed off my "To Do" list, I'd start looking at the work involved in closing the Grizzard acquisition.
What about the stock price? Likely to go back up because the PP is finished and there's no additional reasons to have wize guys lean into the stock by shorting it. They've done the job we asked them to do and buyers, both small and institutional, are going to come back to a market with little selling pressure. So, the stock recovers, tick by tick.
But the next objective is to get the 20 day average price for the period ending 2 days prior to closing Grizzard back to 22.188, the level mentioned in the recent SEC filing:
16.65 shares of MSGI common stock, subject to adjustment
for increases or decreases in the 20 trading day average
price per share of MSGI common stock two trading days
prior to the closing date, as measured against the 20
trading day average closing price per share of MSGI common
stock two trading days prior to the date of the signing of
the merger agreement, which was $22.438 per share (for
purposes of this proxy statement/prospectus we have
assumed that the 20 trading day average closing price per
share of MSGI common stock is $22.188 as determined on
August 9, 1999);
Since nobody with large positions wants to see any dilution through the issuance of more than the proposed additional amount of common stock, we've gotta get the average up. And that means buying more because we know what really drove the price of the stock down and we've received assurances that it doesn't need to happen again.
Since the filing was on July 8, 1999, 90 days thereafter is October 5, 1999. Two days before is October 3, but that's a Sunday. So, by the close of the market on Thursday, September 30, we have to have that average price. Where the stock trades on October 1 (a Friday) and October 4 (a Monday) are largely irrelevant for Grizzard purposes.
But 22.188 is an average. If there are 10 days 3 points below that number, there need to be 10 days 3 points above the average. If there are 15 days 3 points below that number, there need to be 5 days quite a few points above the average.
So, let's start making meaningful announcements, and find one or two analysts willing to step forward and offer a comparison to DCLK. If that occurs, it's going to move the stock, and we'll close the acquisition without further dilution than what was originally intended. And make it accretive, to boot.
Our institutional shareholders, GE, and CMGI are going to love this.
Top Institutional Holders
Rank Institutional Name Report Date Position
1 MORGAN GRENFELL INCORPORATED 03/31/99 602,800
2 GRUBER & MCBAINE CAPITAL MANAGEMENT 06/30/99 525,800
3 GOLDMAN, SACHS & COMPANY 03/31/99 52,000
4 VANGUARD GROUP, INC. (THE) 06/30/99 36,300
5 MELLON BANK, N.A. 06/30/99 26,355
6 MORGAN STANLEY DEAN WITTER & COMPANY 06/30/99 24,525
7 PAINEWEBBER GROUP, INCORPORATED 03/31/99 24,200
8 BURNHAM SULLIVAN & ASSOCIATES 06/30/99 8,300
9 NORTHERN TRUST CORPORATION 06/30/99 7,900
10 BARCLAYS BANK PLC 03/31/99 7,507
So, in a virtual dreamland, that's how I'd work the closing. Sure, there's going to be a lot of schmoozing along the way and more than just casual fingernail maintenance that cuts to the quick. But big money (relatively speaking) is involved.
With a little bit of market support, we may just pull it off.
Hope I'm not dreaming...
Mark A. Peterson |
