Allen Dumps Charter Stock

Allen Dumps Charter Stock
Private Deals For 28.5 Million Shares Net MSO Chairman $996.36
Mike Farrell -- Multichannel News, 6/19/2009 10:10:19 AM MT

Charter Communications chairman and Microsoft co-founder Paul Allen sold about 28.5 million shares of Charter stock - essentially all of his Class A common stock holdings - for less than $1,000, according to a Securities and Exchange Commission filing Thursday.

According to the filing, Allen, who has reportedly invested $7 billion of his own money in the company since 1998, sold the shares in several private transactions for $0.000035 each. At that price, Allen's 28,467,421 shares reaped a total of $996.36. The stock, which had been delisted on the National Association of Securities Dealers Automated Quotation system (NASDAQ) shortly after Charter filed for Chapter 11 bankruptcy protection on March 27, has been trading on the over-the-counter market, also known as the "pink sheets." The stock was trading at about 3 cents per share in Friday morning trading .

Just why Allen chose to sell what are essentially worthless shares - and who would buy them - is a mystery. Charter referred all comment to Vulcan Inc., the holding company for Allen's private investments. Vulcan spokesman David Postman said in an e-mail message that the company does not comment on these issues and "will let the filing speak for itself."

Analysts also appeared puzzled by the transaction.
"Perhaps [he] sold to someone who is looking for a little tax shelter?" guessed Miller Tabak media analyst David Joyce, who used to follow the stock when it traded on NASDAQ. "I really don't know."

The sale doesn't seem to affect Allen's position in Charter once it emerges from bankruptcy, expected sometime this summer. Allen, who had previously owned 52% of Charter equity and 91% of its voting shares, will end up with a 4% equity stake and 35% of the vote in the new company.