Like many out there, I'm very curious about the story that's been developing over the past six months or so about Midway Games, Sumner Redstone, and Mark Thomas.
It starts like this: Sumner Redstone, once a super rich gazillionaire, found himself a little short on cash, and ended up selling all his holdings in Midway for a meager $100,000 to Mark Thomas, actually Mark Thomas' company, MT Acquisition Holdings LLC. Those holding amounted to 87% of Midway - enough to warrant control the company.
Why would Sumner Redstone do such a thing? Isn't Midway worth more than that? I believe that Redstone did so to gain a tax credit for the loss. And it may have also been necessary to make some "fast cash".
On the flip side, why would Mark Thomas buy the company for $100,000? That's a no-brainer, right? The company has a lot of debt, and may not even be worth $100,000. My guess is that Mark is a savvy investor who will be able to extract more than $100K from the company. The company filed for bankruptcy just a few months after the stock transaction, and will probably lay off a bunch of employees in the coming months. It might even start to be split into pieces and liquidated.
This is a very interesting story and I feel its going to get more interesting in the coming months. Any guesses as to what will happen?
It starts like this: Sumner Redstone, once a super rich gazillionaire, found himself a little short on cash, and ended up selling all his holdings in Midway for a meager $100,000 to Mark Thomas, actually Mark Thomas' company, MT Acquisition Holdings LLC. Those holding amounted to 87% of Midway - enough to warrant control the company.
Why would Sumner Redstone do such a thing? Isn't Midway worth more than that? I believe that Redstone did so to gain a tax credit for the loss. And it may have also been necessary to make some "fast cash".
On the flip side, why would Mark Thomas buy the company for $100,000? That's a no-brainer, right? The company has a lot of debt, and may not even be worth $100,000. My guess is that Mark is a savvy investor who will be able to extract more than $100K from the company. The company filed for bankruptcy just a few months after the stock transaction, and will probably lay off a bunch of employees in the coming months. It might even start to be split into pieces and liquidated.
This is a very interesting story and I feel its going to get more interesting in the coming months. Any guesses as to what will happen?
The gaming industry has proved to be nearly recession proof, so regardless of the fact that Midway is in bankruptcy I don't think it would be too hard for somebody with the right knowhow and talent to turn them around.