Billionaire investor Carl Icahn increased his holding of Motricity Inc. (MOTR, Financial) by 157.54% on Oct. 11, 2012, according to GuruFocus Real Time Picks.
The transaction was for 10,684,237 shares. Added to the 6,782,039 shares he already owned since the second quarter of 2011 when he initiated the position for $10 per share on average, he owns a total stake of 17,466,276 shares. This share count represents 30.73% of the company.
Icahn bought the shares in a rights offering Motricity began on July 20, in which it issued 44,098,926 units, each consisting of 0.02599 shares of its 13% preferred stock and 0.21987 warrants, each worth one share of common stock with an exercise price of $0.65 per share. The investor exercised his subscription privileges in full, for a total cost of $28.67 million.
Motricity provides relevance-driven merchandising, marketing and advertising through a suite of mobile data service solutions. The company has lost about 95% of its market capitalization since it held its IPO in 2010. It held the rights offering to strengthen its balance sheet.
As of the second quarter 2012, Motricity has announced four consecutive quarters of revenue decline and four consecutive quarters of decreasing net losses.
"The steps that we took to transform the company are beginning to flow through to Motricity's financial results, resulting in positive income from operations, positive EBITDA from continuing operations and cash generation during the second quarter," said Jim Smith, interim chief executive officer. "Over the past three quarters we redirected the strategy of the company to execute more clearly on three lines of business in the mobile sector — carrier, media and enterprise. We also exited non-strategic areas, reduced operating costs and restructured our headcount to align with the company's business.”
At quarter end, Motricity had $17.6 million in cash on its balance sheet and $21.66 million in long-term liabilities and debt. One of its term loans (of more than $20 million and due Aug. 28, 2013) is held by High River Limited Partnership, which is owned by Carl Icahn, and secured by a lien on substantially all of the company’s assets.
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The transaction was for 10,684,237 shares. Added to the 6,782,039 shares he already owned since the second quarter of 2011 when he initiated the position for $10 per share on average, he owns a total stake of 17,466,276 shares. This share count represents 30.73% of the company.
Icahn bought the shares in a rights offering Motricity began on July 20, in which it issued 44,098,926 units, each consisting of 0.02599 shares of its 13% preferred stock and 0.21987 warrants, each worth one share of common stock with an exercise price of $0.65 per share. The investor exercised his subscription privileges in full, for a total cost of $28.67 million.
Motricity provides relevance-driven merchandising, marketing and advertising through a suite of mobile data service solutions. The company has lost about 95% of its market capitalization since it held its IPO in 2010. It held the rights offering to strengthen its balance sheet.
As of the second quarter 2012, Motricity has announced four consecutive quarters of revenue decline and four consecutive quarters of decreasing net losses.
"The steps that we took to transform the company are beginning to flow through to Motricity's financial results, resulting in positive income from operations, positive EBITDA from continuing operations and cash generation during the second quarter," said Jim Smith, interim chief executive officer. "Over the past three quarters we redirected the strategy of the company to execute more clearly on three lines of business in the mobile sector — carrier, media and enterprise. We also exited non-strategic areas, reduced operating costs and restructured our headcount to align with the company's business.”
At quarter end, Motricity had $17.6 million in cash on its balance sheet and $21.66 million in long-term liabilities and debt. One of its term loans (of more than $20 million and due Aug. 28, 2013) is held by High River Limited Partnership, which is owned by Carl Icahn, and secured by a lien on substantially all of the company’s assets.
GuruFocus Real Time Picks alerts you of the stock purchases and sales that Gurus have made within the last two days. Follow your favorite Gurus closely with GuruFocus' Premium Membership. If you are not a Premium Member, we invite you for a 7-Day Free Trial.
