Hi there,
Brief Answer:
It appears impossible to take over the company, because the major
shareholders are probably not wanting to sell. If someone did achieve
a takeover, the $80 million in debt would be paid back from any future
profits.
-----------------
You are correct; the market capitalization is very low. Salon have
been very lucky to avoid a NASDAQ delisting, because the rules say
they need a capitalization of more than $1 million.
http://news.moneycentral.msn.com/ticker/article.asp?Feed=BW&Date=20020821&ID=1874659&Symbol=US:SALNC
The initial public offering of 2,500,000 shares is dwarfed by those
owned by executives, directors and corporate investors. The tables
below illustrate the ownership of Salon Media Group - the first is
from their IPO prospectus, and the second is an SEC filing from May
14, 2002.
Looking at the trading chart, volume never exceeds 300,000, which
suggests that most of the trades are shares from the IPO.
http://finance.yahoo.com/q?s=salnc&d=c
The other shareholders seem quite happy to sit on theirs:
Insider & restricted shareholder transactions reported over the last
two years
http://biz.yahoo.com/t/s/salnc.html
I think the three main aspects to consider are:
1) The big shareholders previously had the opportunity to sell their
shares for $10 or more, but they didn't. Unless they desperately need
the money, I can't see them selling for 5 cents a share.
2) It seems quite certain that the company will fold in the near
future - see this June 2002 news item:
"Salon Media Group said Wednesday it has been unable to make a
profitable business around its provocative Internet magazine and its
auditors had "substantial doubt" about its ability to continue as a
going concern."
http://news.com.com/2100-1023-939749.html
3) They don't have $80 million in debt, in terms of debts they have to
pay interest on. It is venture capital, and in their balance sheet it
is listed as "retained earnings". This basically means that if Salon
ever makes a profit, the first $80 million of it goes to those
backers, before there can be any dividends.
Balance Sheet
http://biz.yahoo.com/fin/l/s/salnc_qb.html
MY OPINION
==========
If the major shareholders wished to sell, they'd probably want much
more that 5 cents per share. Even if someone did acquire Salon for
$700K, they would want to be very confident of making future profits
in excess of $80 million, or else they would be wasting their time.
Pre-IPO Shareholders
====================
Percentage of
Shares
Outstanding
-----------------
Number of Shares Prior to
After
Name and Address of Beneficial Owner Beneficially Owned Offering
Offering
------------------------------------ ------------------ --------
--------
Named Executive Officers and Directors
David Talbot............................ 402,083 4.8%
3.7%
Michael O'Donnell....................... 158,333 1.9
1.5
Marc Wernick............................ 11,510 *
*
Standish O'Grady........................ 3,777,863 44.9
34.6
Sada Chidambaram........................ 476,690 5.8
4.4
Jim Rosenfield.......................... 10,156 *
*
Norman Lear............................. 283,505 3.4
2.6
Ronald Celmer........................... 644,330 7.8
6.0
All executive officers and directors as
a group (12 persons)................... 5,866,084 66.2
51.6
5% Stockholders
Adobe Ventures.......................... 2,833,397 33.8
26.1
c/o H&Q Venture Associates, LLC
One Bush Street,
San Francisco, CA, 94104
Bruce R. Katz........................... 973,003 11.8
9.1
c/o Rosewood Stone Group
2320 Marinship Way, Ste. 240
Sausalito, CA 94965
H&Q Salon Investors, L.P................ 944,466 11.4
8.8
c/o H&Q Venture Associates, LLC
One Bush Street,
San Francisco, CA 94104
Constellation Venture Capital............. 644,330 7.8
6.0
575 Lexington Avenue,
New York, NY 10022
Wasserstein Adelson Ventures, L.P......... 515,464 6.3
4.8
31 W. 52nd Street, 26th Floor,
New York, NY 10019
DOTCOM Ventures, L.P...................... 476,690 5.8
4.4
3945 Freedom Circle, Suite 730,
Santa Clara, CA 95054
http://ir-web.finsys.com/redirect_frames.asp?filename=0000929624%2D99%2D000683%2Etxt&filepath=%5C1999%5C04%5C19%5C07%5C&pdf=0
All of their SEC Filings are available at EDGAR:
http://ir-web.finsys.com/Results.asp?criteria=cik_code&CIK=0001084332
CURRENT SHAREHOLDERS
====================
*These figures include exercisable options, which is why they add up
to more than the current number of shares, 14,155,276.
Adobe Systems Incorporated (4)...... 6,378,458
34.7%
345 Park Avenue
San Jose, CA 95126
William R. Hambrecht (5)............ 4,988,350
29.0%
539 Bryant Street, Suite 100
San Francisco, CA 94107
Constellation Venture Capital (6).... 2,183,765
13.9%
Bear Stearns Asset Management
575 Lexington Ave.
New York, NY 10022
Rainbow Media Holdings, Inc. (7).... 1,125,000
7.9%
1111 Stewart Ave.
Bethpage, NY 11714
Granite Ventures LLC (8).............. 870,706
6.1%
One Bush Street
San Francisco, CA, 94104
EXECUTIVE OFFICERS AND DIRECTORS
Dr. John Warnock (9)............. 3,054,436
17.7%
Rob McKay (10)................... 1,727,629
11.0%
Michael Fuchs (11)............... 1,515,000
9.7%
David Talbot (12)................ 741,941
5.1%
Michael O'Donnell (13)........... 549,611
3.7%
Scott Rosenberg (14) ........... 108,022
*%
Robert O'Callahan (15)........... 77,184
*%
Patrick Hurley (16)............... 74,497
*%
James H. Rosenfield (17)......... 59,037
*%
Brian Dougherty (18)............. 55,594
*%
Robert Ellis .................... 10,000
*%
Directors/Execs as a group...... 7,972,951
37.1%
*Less than one percent (1%).
From Yahoo! Finance
http://biz.yahoo.com/e/l/s/salnc.html
Search strategy:
I went direct to StreetEYE, the investment meta-search engine and
searched for Salon
http://www.streeteye.com/cgi-bin/allseeing.cgi
I trust this answers your question. If any portion of my answer is
unclear, please ask for clarification.
Best wishes,
robertskelton-ga |
,
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