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29 Comments
- zydeco, on 02/16/2009, -0/+19Midway has been a scam from the day it was created.
When Neil Nicastro ran WMS (cough cough sorry, I meant Williams Electronics), he took the video game group and split it apart from Williams. Williams shareholders got Midway shares, worth about $24, for each WMS share they owned while the value of WMS stock went to almost nothing.
Everytime Midway started having financial trouble and the stock started dipping, Sumner Redstone was there to buy more and prop it up. Sumner and the Nicastro family go a long ways back, and if you look hard enough you'll see why Redstone owes them big time for some favors in the past. I'd be happy to elaborate in another post.
It's been backscratching and logrolling ever since. Neil "retired" (with a huge "severance package") a while back. That was just about the time everyone finally figured out he knows nothing about making great games, just playing the stock market. He's somewhere else now, smoking cigars and driving vintage Cadillacs while the current CEO (a nice guy and all) got stuck with the bill.
All in all, it's a shame. Midway was the end of a long videogame legacy going all the way back to Defender. The money guys got in and turned a great thing into an ATM, and when that was empty they left it to rot. - AndrewDB, on 02/16/2009, -0/+5Well, I guess midway was Blitzed out of nowhere with this one.
*With all the Mortal Kombat puns around here, I figured I'd remind people of another game they made, NFL Blitz. - thebloodvayne, on 02/16/2009, -1/+5*Sigh* Obvious "Fatality!" joke...
RIP Midway. (for now, at least) - phylum, on 02/15/2009, -1/+5considering you can sell property for a $1 just to get out of the taxes ,sounds like what has happened here.
- slyzxx, on 02/16/2009, -0/+4Its so sad to see this company crumble like this. First they laid off people then they went bankrupt and now this pops up even though its really looks suspicious.
- maxlightz, on 02/16/2009, -0/+3Toasty!
- LanceUppercut, on 02/16/2009, -0/+3what?
Capital gains kind of negates this since most people don't buy sell or swap property that they live in, and primary residence is usually exempt from capital gains for $250k single or $500k married if the property is held for two years.
Now buying and fixing up a house then moving after 2 years makes sense. The builder that built 5 houses on my street lived in each one while he worked on the one next to it, seemed to do pretty well for himself and the houses were actually built decently since he would actually live in them... - petebot, on 02/16/2009, -0/+3I like the way you NBA JAMmed that in there...
- Hypomanic, on 02/17/2009, -0/+2Everyone does this. Even the government. They seized Washington Mutual then handed it to JP Morgan Chase for $1.9 billion. That might as well be $100,000 in the banking world. If you're a common shareholder, just get out of stocks period. They will screw you. I wonder how much these creeps can sell the Mortal Kombat brand for? Eidos got over $100 million for Tomb Raider.
- ILoveBoobies, on 02/16/2009, -0/+2Greedy *****!
- oldenburg06, on 02/16/2009, -0/+1GET OVER HERE!!!!
- fitzfan, on 02/16/2009, -0/+1Debt holders have priority over equity holders, so if the company has 300 million in debt and is only worth 150 million, the equity is worthless. This guy Thomas, would risk 100,000 on the small chance that the company ever gets back to being worth more than the debt it has taken on. It is more likely that Midway stops being able to make their interest payments and goes into bankruptcy where the creditors would receive pennies on the money they lent out. Thomas wont get anything.
- inactive, on 02/16/2009, -0/+1An interesting topic, but I think the article is a bit misleading. It's not uncommon for people/entities to buy companies for relatively little cash + the assumption of debt. I don't think Mark Thomas was expecting to payback the $300M anytime soon. What is curious is that the balance sheet (supposedly) ballooned overnight to reflect these massive liabilities. If that is the case, then I would expect a serious inquiry.
- geezshock, on 02/16/2009, -0/+1Mark Thomas is SHANG TSUNG c'mon....the guys a shape shifter... remember ?!?!... bleh...still bankrupt.
- zydeco, on 02/18/2009, -0/+1Here's two for you to start with.
"Redstone-Tied Concern Invested in Viacom"
http://query.nytimes.com/gst/fullpage.html?res=9F0 ...
In this article, we explore how the SEC investigated the mysterious purchase of a huge block of Viacom stock by WMS. The resulting price boost was enough to allow Redstone to outbid QVC for Paramount Studios, using Viacom stock as collateral. In the end, the SEC found no wrong-doing. But nobody has offered a valid explanation for the purchase before or since.
WMS Industries 10/K filed 6/30/1998
http://www.secinfo.com/dsvR3.753n.htm
This is the WMS filing with the SEC from mid-1998. This is where Neil "quit" WMS to run Midway and was paid $2,500,000 from WMS' coffers as a "termination fee". About a year later, WMS shut down all coin-operated game manufacturing to focus on slot machines exclusively. Neil obsessed over making WMS into a gaming company, then pretty much abandoned ship after losing major patent cases to rival IGT. - davidjunit, on 02/16/2009, -0/+1If these are the people that programmed the AI in Mortal Kombat 2 (arcade) then yes, they're extremely GD SHADY.
- yaazz, on 02/18/2009, -0/+1[citation needed]
- ichbinladen, on 02/17/2009, -0/+1Selling a company with hundreds of millions in outstanding debt for $100,000 is the definition of a shady deal. Sumner Redstone and Mark Thomas are about to become very familiar with the DoJ.
- christinme, on 02/16/2009, -2/+3this is precisely why this country needs socialism. Business should be run by people who aren't looking to make a buck any way they can. This is a scam and it is sick. Buy a company for 100k then sell it whatever for a ton more money just to make money. I hope the owner dies a lonely person.
- spoon088, on 02/16/2009, -0/+1Corruption in America? Is this really new?
- babydick, on 02/17/2009, -0/+1Finish... Me?
- MindStalker, on 02/16/2009, -0/+1No, we're not talking about getting out of capital gains taxes. We're talking about liens on the property. Lets say you have a house worth $50,000, but there are $50,000 or more in tax liens against the house. If it goes into foreclosure the buyer will buy it for $1 but will still owe $50k because that's how much debt the house is in. While $50k is an EXTREME example, many foreclosed homes that are bought for less than $1000 often have well more than a thousand in back taxes owed.
- wafflesomd, on 02/16/2009, -1/+1Is this guy serious?
- Tyrant505, on 02/16/2009, -1/+1I remember Lebed pumping them when dc vs mc was releasing...
- inactive, on 02/24/2009, -0/+0I think this title deserves "Friendship" over "FATALITY" for insider traders working together.
- icreonerp, on 02/21/2009, -0/+0Its Part of the game.!!
http://www.icreongamestudio.com - inactive, on 02/16/2009, -1/+0finish him
- ChristBehemoth, on 02/16/2009, -3/+2This sucks really. Mortal Kombat is a great series, I just hope it doesn't die out.
- adam1378, on 02/16/2009, -3/+2These money exchanges have been going on in corporate America for years. This isn't new or unique, just the uppercrust milking the system they created. It seems the system is failing now and what was considered *business* is now being revealed.
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