To embattled Primedia boss Tom Rogers, a meager 34 cents meant a lot yesterday.
Rogers has seen nearly $20 million disappear from his personal holdings of the company this year, as his company’s shares have continued to plummet.
But yesterday, at least, he managed to recoup some of his losses in an unusual run on Primedia stock.
Stock in Primedia jumped nearly 18 percent – 34 cents – to $2.32 in heavy buying by speculators.
It gave Rogers a modest $579,408 gain on his common stock of the media holding company, which had been hammered to new lows in recent days.
Trading in Primedia jumped by two and one-half times its usual volume on talk that Primedia would consider breaking itself up. A company source denied there was any plan for a breakup.
One industry source said it was also unlikely that Primedia’s controlling investor, Henry Kravis, and his partners would take the company private to ensure a smoother break-up auction.
“They can’t afford to cough up the money for it,” said the source. Primedia’s market value is around $504 million – sharply lower than its market value of $2.17 billion just a year ago.
Primedia has pledged its stock against $2.3 billion in long-term borrowings, according to regulatory filings.
Meanwhile, Kravis and Rogers are selling off at least $250 million in non-core Primedia assets in the fourth quarter, including seven gun titles, such as Guns & Ammo and Shooting Times, and its public relations Bible, Bacon’s.
If they continue to sell assets for funds to pay interest due on its $2.3 billion of long-term debt, they run a risk of undermining the stock and further depressing its price, some analysts say.
Kravis and his partners control 68 percent of Primedia.
Rogers is trying to turn around the company’s fortunes under a four-year contract that expires in September 2003, giving him $1.2 million in salary, $800,000 in guaranteed annual bonuses and 3 percent of any Internet company that Primedia launches.
To show his confidence in his task, just a week after the terror attacks Rogers announced he had bought $1 million of Primedia stock.
Since that time, Rogers’ $1 million investment has mostly evaporated.
Rogers spent about $1.06 million for 235,016 shares since around Labor Day. Those same shares are now valued at around $545,000.
Since Labor Day, his stake in the common shares has plunged from $9.4 million to $4.2 million. Rogers’ 3.2 million options are worthless but had a value as high as $16 million a year ago.