MPH Stock

[nitehusky]

Have you guys noticed what's been going on with MPH (CART's stock) today. There have been over 550,000 shares traded today. An average day for CART is about 20,000. Something is going on...

Wonder who's buying - or selling???

[indycool]

That's huge. Only thing I can think of is that Krevlin or Vannini might be unloading to take a loss for 2002 taxes. Other thing might be that CART's doing the buyback it's authorized to do and has not yet executed.

But you're right. SOMETHING is going on.

[macdaddy]

I sold some of my stock to my wife.
That's all that was.

[The Snout]

Only thing I can think of is that Krevlin or Vannini might be unloading to take a loss for 2002 taxes

Out of interest. Whom are Krevlin or Vannini ?

[f1manoz]

CART should buy all the stock back and go private again... just a thought. As this constant speculation on share price etc just gives the unfaithful more reason to whinge, complain and call for the series death.

[nitehusky]

Originally posted by f1manoz
CART should buy all the stock back and go private again... just a thought. As this constant speculation on share price etc just gives the unfaithful more reason to whinge, complain and call for the series death.

This is exactly what CART would love to do but its not that simple. You can't just tell all the shareholders you want to go private and "pay them out". The legal tangles are unfortunately much more involved than that.

[Flatspot]

I think you have it Indycool. Year end tax sales. May be the guys you say or some institutional investors at that volume. Look at other stocks with sizable losses on the year and you will see the bigger volume today and tomorrow also.

[indycool]

Okay, it was a "block sale" of 522,000 shares that was reported around Noon yesterday. The share price didn't move much so it had to be a private sale, much like Forsythe's buyout of Grosveld.

In that case, the board reported the waiver of the shareholder rights agreement for Forsythe after the deal was done.

Snout, Glenn Krevlin and Jon Vannini are two of MPH's major shareholders. I believe Vannini is second to Forsythe and Krevlin is third in shares controlled at this point.

The buy is less than the five percent of shares outstanding that would require to be reported unless Forsythe, Vannini or Krevlin did the buying, adding to their reported load.

Nothing is on Edgar yet.

[Snrub]

You could buy it all back, but it would probably cost a minimum $5.00/share. That would be like $75 million, think CART has that much money?

[indycool]

The 522,200 shares that were yesterday's private block buy went for $3.50 a share.

[sgw2]

I would assume that Forsythe bought these shares in a Private deal. The number does not match any of the institutional investors (they owned over 6 M shares on 9/30/2002) or any of the owners I know of. If I had to hazard a guess I'd say that Krevlin sold out, having dumped 447,800 shares earlier.

This would bring Forsythe's direct ownership total to 4,186,982 (28.45%). Vannini holds 1,255,000 (8.53%). The only team owners, besides Forsythe, who kept anything are Haas with 200,500 shares and Patrick with 98,400 shares. All other pre-IPO owners long ago dumped (Rahal, Green, Walker, Ganassi, Penske, Coyne, and the rest).

You can find the institutional owners here (State Street sold all its' shares since this report).

http://biz.yahoo.com/hd/m/mph.html

Expect a filing in the next two weeks.

Snrub,

CART wont buy back stock - though the BoD authorized over 1 M shares - even at $3.50 value (though it would be a good move). Why bother? Forsythe is doing it for them.

[BobbyB]

Whats the deal? CART's name in the NYSE is supposed to be MPH, right? I've never seen it listed on the Dow Jones or NASDAQ. Where is it listed?

[Snrub]

Originally posted by sgw2
Snrub,

CART wont buy back stock - though the BoD authorized over 1 M shares - even at $3.50 value (though it would be a good move). Why bother? Forsythe is doing it for them.

I'm not saying they would buy them back. I was saying even if they wanted to they couldn't. To buy all outstanding shares you must have a substantial primium, hense why I suggested $5/share. You've got a good point that Forsythe practically has a controlling stake. You don't always need 50%+1 to have a effective controlling stake. eg. Renault with Nissan and Ford with Mazda.

[indycool]

Good link, sgw2...I believe Johnson has sold out its shares since the report, also. Seems to me I read that in a Speed Sport News article.

I agree...it's probably Krevlin....

[sgw2]

BobbyB,

MPH is a small stock (sub $4 , 14.7 M shares, $55 M market cap) and so it wont make the Dow Index or even the ticker that often. A typical day sees less than $300 K in trading.

Snrub,

CART's BoD authorized a buy back of 2.5 M in April 2001, and by December 2001 they had bought back 1,054,000 shares at a cost of $15.5 M. The finance director can purchase up to 1,446,000 additional shares from the open market at any time. CART does not have to pay any premium.

The point is Forsythe-Vannini and Pook at their leisure have a lock on CART. Privitization only allows deals to be done in secret. There is absolutely no threat of any hostile takeover.

[Snrub]

Stock price is based on someone wanting to buy and sell. It's a lot easier to buy stock slowly over time because you're more likely to find someone who wants to sell and the price isn't inflated. I would suggest there are people who currently own the stock and believe it is worth more than $3.50 to them. It would be a bit risky, but now would probably be a good time to buy in. If I had some MPH shares right now I wouldn't give them up for $3.50. So if CART wanted to buy them specifically from me they'd have to pay more than $3.50. Picture it on a larger scale and that's what I was trying to point out.

I should have phrased it differently. If they wanted to buy out all shares at once they'd end up paying a primium.

[BobbyB]

Originally posted by sgw2

MPH is a small stock (sub $4 , 14.7 M shares, $55 M market cap) and so it wont make the Dow Index or even the ticker that often. A typical day sees less than $300 K in trading.

sgw2-
Thanks for the clarification. Two years ago, I was mad at myself for not owning any stocks at all. Today, I'm in the same situation but my anger has totally disappeared! So, I don't have a working knowledge of the fine points of the market. Thanks for the schooling!
Bob

[indycool]

sgw2 seems to have better knowledge of the financial stuff than most on the forums. I would think buying in at $3.50 now would be very risky. MPH has eliminated financial guidance conferences and all analysts but one (Dennis McAlpine) have dropped them. The cash burn for '03 (variously, $45.3 million to $70 million) plus the legal issues MPH faces reduces the market cap and that could drop the share price even lower.

As sgw2 said, Forsythe is buying up stock, so he's doing the buyback for CART anyway, so CART doesn't need to. What Forsythe will do with it is anyone's guess.

[indycool]

Today, Jan. 9, MPH hit an alltime low of $3.09 and with 1 1/2 hours left in trading for the day, it was $3.20 on volume of 59,000 shares.

On another forum, a poster reported Forsythe had sold 170,000 shares in late December. Nothing on Edgar yet.

sgw2, what do you think?

[sgw2]

If Forsythe is selling there will be a panic. He is the rock upon which CART is resting. I have doubts about this because somebody had to have bought up the 500 K shares in that Private deal. If not Forsythe, then CART itself?

I think the stock fell today because of the Brands Hatch announcement. It was soon obvious that instead of lucrative $2-4 M contracts from two or three European promoters, CART will be renting the track, paying the freight, and promoting the race out of their own pocket. Think of Chicago and add $1 M for freight. To the market that is a lowering of projected earnings in the range of 70¢ per share.

I am waiting for the SEC filings to see what is happenning.

[indycool]

Could be. There are a lot of questions here. Guess we'll wait out Edgar.

It's among the rumors that there'll be a second European round in Germany announced shortly, but I'm waiting to see on that, too.

Even if there IS a second Euro race, CART's still splitting the freight tab and it has 3 1/2 months to promote a show at Brand's. Pretty tall order and as you said, Chicago wasn't a good revenue call.

[BobbyB]

I hate to say it, but it almost sounds like the cost of these long range overseas forays almost outweighs their benefits. Times are tight- get it? A million bucks to ship equipment & people for a weekend is not fiscally responsible, regardless of the desire of overseas fans. Not particularly a good time to try to expand outside of North America in my opinion (although I wish it were otherwise!).

[indycool]

If CART's announcing Lausitz today, it must be a CART promotion, too. That means MPH is footing the freight for the whole trip. Pretty risky program.

[Snrub]

I think even for $1 million it would make financial sense. You've got 2 European races. Germany had 150,000 fans show up. Let's say it drops to 125,000 this time and Brands get's 75,000. Every ticket will have $5 of its cost associated with the transit. That's not bad at all.