Billionaire investor
Carl Icahn
increased his holding of Motricity Inc. (
MOTR
) 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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