Claim: Zelnick Media would be disaster for BusinessWeek
Doug McIntyre, the editor of 24/7 Wall Street, writes that BusinessWeek bidder Zelnick Media’s track record of involvement with some companies it has invested in has not been good.
McIntyre writes, “Whatever the track record of Zelnick Media may be with private transactions, Zelnick has been part of the management and/or boards at two public companies which has become disasters for shareholders.
“In May of 2005,Â Strauss Zelnick was part of the dream team of directors that Carl Icahn helped put on the BlockbusterÂ board of directors. Icahn joined the board himself. The other member of the group was Edward Bleier, a former Warner Bros. EntertainmentÂ executive. Since the three joined the board, Blockbusterâ€™s shares have dropped from $10 to $1. From 2005 to 2008 Blockbuster has had net losses of over $1 billion. Zelnick made $77,671 serving on the companyâ€™s board last year, according to its proxy.
“The situation at Take-Two Interactive, where Strauss Zelnick is the chairman, is even worse. Zelnick Media took over effective day-to-day control of Take-Two under a management contract in March 2007. The share price of the video game company was $23 then. The stock trades just above $11 now. The stock rose as high as high as $27 in mid-2008 when Electronic ArtsÂ made a bid to buy Take-Two. The board turned the offer down. Over its last four fiscal quarters ending July 31, Take-Two has had a net loss of $130 million, and revenue has declined each quarter over that period.”
Read more here, where McIntyre goes through the SEC filings that detail the large management feeds that Zelnick charges.