KARMAZIN SELLS 15% OF HIS
VIACOM STOCK
According to The New York Times, the move not only made investors wonder if Karmazin was losing faith in the stock’s growth potential, but, according to a source close to the company, it also upset Viacom CEO and controlling shareholder Sumner M. Redstone. Always the Viacom optimist, Redstone has never sold any of the shares of his company and has limited Karmazin’s right to sell stock to no more than 800,000 a year.
But, according to the Times, it might have been more the timing of the sale than the amount sold that upset Redstone. "Mel still holds roughly 93 percent of his position," John Tinker of hedge fund Steamer Capital told the Times. But he added, "People are nervous because we are a bear market, and advertising is soft."
Said one analyst, "This is the guy who, last August, was arguing that when Viacom's stock was at $74, it was really worth $100 a share and that it was extremely undervalued." Early on Tuesday, Viacom was trading at $50.75, quite a distance below its 52-week high of $75.69 last August.
Even though Karmazin still has voting control of 3.8 million shares of Viacom, Redstone is apparently not happy about the signal the sale sends to the investment community.
The explanation could be as easy as the fact that Karmazin remarried earlier this year and wanted to liquidate some of his holdings. But isn’t it more entertaining to imagine something nefarious is afoot?
