Wangtang Clan http://wangtang.posterous.com stuff from the wangtang clan! posterous.com Thu, 04 Dec 2008 20:01:00 -0800 Mark Thomas is... LEX LUTHOR? http://wangtang.posterous.com/mark-thomas-is-lex-luthor http://wangtang.posterous.com/mark-thomas-is-lex-luthor

Now I think that maybe he's an evil mastermind genius.

Let's review:

1) Mark Thomas buys 87.2% of Midway for $100k. 
    2008-12-01 Form SC 13D/A - Stock Purchase Agreement 

STOCK PURCHASE AGREEMENT, dated as of November 28, 2008 (this "Agreement"), among NATIONAL AMUSEMENTS, INC., a Maryland corporation (the "NAI"), SUMCO, INC., a Delaware corporation ("Sumco"), SUMNER M. REDSTONE ("SMR" and, collectively with NAI and Sumco, the "Sellers") and ACQUISITION HOLDINGS SUBSIDIARY I LLC, a Delaware limited liability company (the "Purchaser"). 

A.           The Sellers, collectively, own approximately 87.2% of the total issued and outstanding shares of common stock, $0.01 par value per share ("Common Stock"), of Midway Games Inc., a Delaware corporation (the "Company").

B.           Each of the Sellers wishes to sell to the Purchaser, and the Purchaser wishes to purchase from the Sellers, the shares of Common Stock beneficially owned by the Sellers, upon the terms and subject to the conditions set forth herein.

...an aggregate purchase price of $100,000 (the "Purchase Price") to be allocated among the Sellers...

2) Mark Thomas' newly formed company - AHSI, LLC, receives a $70M IOU from Midway from NAI, Inc.
    2008-12-01 Form SC 13D/A - Participation Agreement 

PARTICIPATION AGREEMENT (this "Agreement"), dated on November 28, 2008 by and between National Amusements, Inc. ("Grantor") and Acquisition Holdings Subsidiary I LLC ("Participant").

... Grantor, subject to the terms and conditions thereof, agreed to make advances and loans (the "Loans") to the applicable Borrower or Borrowers under such Credit Agreement from time to time in an aggregate amount not to exceed at any time outstanding (i) $30,000,000 under the Secured Facility and (ii) $40,000,000 under the Unsecured Facility.  Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to them in the Secured Facility...

... Grantor hereby sells, grants, conveys and transfers to Participant, and Participant hereby purchases, acquires and receives from Grantor, an undivided interest and participation in (a) 100% of all of the Loans made by Grantor..." etc.

3) This triggers an EVENT.
    2008-12-04 Form 8K - Current Report 

Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
The change in control transaction described below in Item 5.01 of this Current Report on Form 8-K and incorporated herein by reference (the "Transaction"), has certain consequences with respect to the Registrant's 6.0% Convertible Senior Notes due 2025 (the "6.0% Notes") and 7.125% Convertible Senior Notes due 2026 (the "7.125% Notes," and together, the "Notes"). Specifically, the Transaction constitutes a Fundamental Change for purposes of Section 3.09 of each of the Indenture, dated as of September 19, 2005, between the Registrant and Wells Fargo Bank, National Association (the "Trustee"), relating to the 6.0% Notes, and the Indenture, dated as of May 30, 2006, between the Registrant and Wells Fargo Bank, National Association, relating to the 7.125% Notes (together, the "Indentures"). Pursuant to Section 3.09 of the Indentures, upon the occurrence of a Fundamental Change, the Registrant is required, within 20 days of the occurrence of the Fundamental Change, to send to each holder of the Notes a notice (the "Fundamental Change Repurchase Notice") regarding the occurrence of the Fundamental Change. The Registrant will be required to specify in the Fundamental Change Repurchase Notice a date (the "Fundamental Change Repurchase Date"), not later than 30 days from the delivery of the Fundamental Change Repurchase Notice, on which holders of the Notes will have the option to require the Registrant to repurchase their Notes at a price, payable in cash, equal to 100% of the principal amount of the Notes plus accrued and unpaid interest. Based on current market conditions, the Registrant expects that all holders of the Notes will elect to require the Registrant to repurchase their Notes in accordance with the procedures outlined above. The Registrant has already received a notice from an investor in each of the 6.0% Notes and 7.125% Notes.
If all of the holders of the Notes exercise their repurchase right under the Indentures, the Registrant would be required to purchase the Notes at a repurchase price of 100% of the principal amount of the Notes, which would equal $150 million. If this were to occur, the Registrant does not believe, on the basis of its current liquidity, that it would have the ability to satisfy its obligation with respect to the repurchase of the Notes. A failure to satisfy its obligations with respect to the repurchase of any of the Notes on a Fundamental Change Repurchase Date would constitute an Event of Default under the Indentures, which would permit the Trustee under each Indenture or the holders of 25% of each series of the Notes to declare all of the Notes of that series immediately due and payable.
A failure of the Registrant to satisfy its obligation to repurchase Notes on a Fundamental Change Repurchase Date would also have consequences under (i) the Loan and Security Agreement, dated as of February 29, 2008, between the Registrant and certain of its affiliates, as borrowers and National Amusements, Inc. ("NAI"), as lender (the "Loan and Security Agreement"), (ii) the Unsecured Loan Agreement, dated as of February 29, 2008, between the Registrant, as borrower and NAI as lender (the "Unsecured Loan Agreement") and (iii) the Unsecured Subordinated Loan Agreement, dated as of February 29, 2008, between the Registrant, as borrower and NAI as lender ((i),(ii) and (iii), collectively the "NAI Agreements"). Specifically, NAI would have the ability in such a circumstance, under the terms of the NAI Agreements, to declare all amounts outstanding under the NAI Agreements immediately due and payable. There is currently approximately $90,000,000 principal amount outstanding under the NAI Agreements. If these amounts were declared immediately due and payable, the Registrant does not believe, on the basis of its current liquidity, that it would have the ability to satisfy its obligations to repay these amounts.
Item 5.01 Changes in Control of Registrant.
The information disclosed in this Item 5.01 is based entirely on information contained in a Schedule 13D/A, dated December 1, 2008, filed with the SEC by Mr. Sumner Redstone, NAI and Sumco, Inc. and the exhibits thereto.
On November 28, 2008, each of Mr. Sumner M. Redstone, NAI and Sumco, Inc. (collectively, the "Sellers") entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with Acquisition Holdings Subsidiary I LLC (the "Purchaser"), pursuant to which the Sellers sold to the Purchaser, and the Purchaser purchased from the Sellers, all of the shares of common stock, $0.01 par value (the "Common Shares") of the Registrant beneficially owned by the Sellers immediately prior to such sale, representing, collectively, approximately 87.2% of the total issued and outstanding Common Shares of the Registrant. Concurrently with the execution of the Stock Purchase Agreement, NAI and the Purchaser entered into a Participation Agreement (the "Participation Agreement"), pursuant to which NAI granted to the Purchaser, and the Purchaser acquired from NAI, (i) an undivided interest and participation in certain of the loans and advances made by NAI, whether before or after the date of the Participation Agreement,pursuant to the Loan and Security Agreement and the Unsecured Loan Agreement and (ii) all of NAI's right, title and interest in, to and under the Loan and Security Agreement and the Unsecured Loan Agreement including guarantees, collateral, pledges, distributions, claims and causes of actions against the borrowers thereunder, all on the terms and conditions set forth in the Participation Agreement. The consideration paid by the Purchaser for the interests acquired under the Stock Purchase Agreement and the Participation Agreement was $100,000. The Registrant does not have knowledge as to the Purchaser's source of these funds. MT Acquisition Holdings LLC is the sole member of the Purchaser. The President of MT Acquisition Holdings LLC is Mark Thomas.

---
Summary
Mark Thomas buys shares in MWY for $100k.
Today's MWY chart:

MWY  - Midway Games Inc. (NYSE)


0.28 -0.02 (-6.67%)  Dec 4 4:03pm ET
Open:  0.34
High:  0.34
Low:  0.22
 
Volume:  409,164
Avg Vol:  152,000
Mkt Cap:  25.80M
Disclaimer

After Hours: 0.25 -0.03 (-10.71%)  Dec 4 4:07pm ET
As of right now, with a market cap of 25.80M, 87.2% is worth $21.34 MILLION ...
He is also now owed $70 Million in loans by Midway ...
This triggers an EVENT which sets in motion the following:
1) Midway now has 30 days to buy back $150M in Notes, money which it does not have right now.
2) If it doesn't, these Notes become immediately due and payable. (Not sure exactly what that means... and if that means it's more than $150M... ?? )
2) This further triggers an event that allows NAI to collect on $90M in debt, immediately due and payable. Of this $90M in debt, Mark Thomas controls $70M of this.
This seems to give Mark Thomas quite a bit of leverage, and puts quite a bit of pressure on Midway now, but I'm not quite sure how it all works out... Definitely seems like evil genius material though.

January will be an interesting month, eh?
Lex

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Thu, 04 Dec 2008 00:50:00 -0800 Midway's Batman or Underpants Gnomes? http://wangtang.posterous.com/midways-batman-or-underpants-g http://wangtang.posterous.com/midways-batman-or-underpants-g
"Wanted: Information on Mark Thomas, head of Acquisition Holdings Subsidiary I LLC.

His identity is like Batman's: unknown. Everyone in the gaming metropolis is buzzing about who Thomas, the man who Friday agreed to pay $100,000 for an 87% stake in Midway, the publisher of Mortal Kombat vs. DC Universe, actually is. Here are some bare-bones facts:

  • Thomas wants to be a passive investor, said Peter Kolevzon, an attorney with Kramer Levin Naftalis & Frankel, the New York law firm that is representing Thomas in the transaction.
  • Thomas is the primary investor and beneficiary of the generically named Acquisition Holdings Subsidiary.
  • He does not intend to be on Midway's board. Nor does he plan to get involved in the management of Midway despite his huge stake in the Chicago company, Kolevzon said.
  • He is a U.S. citizen, city unknown.
  • He is not granting interviews.

Bruce Wayne may be the Dark Knight, but is this Thomas character Midway's white knight?

...

On the credit side of the ledger, he gets 87% of a video game publisher that owns the Mortal Kombat franchise. Midway also had $10.5 million in cash and $21.6 million in receivables as of its last quarter, ended Sept. 30. He also gets a $70-million I.O.U. that Midway once owed to National Amusements -- Midway's payments on that loan will now go to Thomas.

On the debit column, Midway has $150 million in outstanding loans, not including the $70 million it will owe Thomas. It also has a payroll of about 900 employees that it is struggling to meet. Last quarter, the company lost nearly $76 million on $51.4 million in revenue."

--------

This all seems kind of bizarre. 

Phase 1) Buy company that is saddled with debt, bleeding cash for $100k and "Be a passive investor" i.e., "Don't do anything"
Phase 2) ???
Phase 3) PROFIT!

http://en.wikipedia.org/wiki/Gnomes_(South_Park_episode)

Mortal_kombat_batman

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Tue, 02 Dec 2008 20:42:03 -0800 Gold farming - sketchy stuff... http://wangtang.posterous.com/gold-farming-sketchy-stuff http://wangtang.posterous.com/gold-farming-sketchy-stuff Here's a Wired article about Gold Farming and IGE. I met Brock a couple years ago at GDC at some dinner. He seemed like a nice enough guy at the time. Sounds like he got out at the right time.

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Mon, 01 Dec 2008 10:28:00 -0800 Midway Sold for $100k! Ouch! http://wangtang.posterous.com/midway-sold-for-100k-ouch http://wangtang.posterous.com/midway-sold-for-100k-ouch

Best headline:
Sumner Redstone’s Black Friday Sale: Unloads Midway Games for Spare Change, Tax Benefit 
http://mediamemo.allthingsd.com/20081201/sumner-redstones-black-friday-sale-unloads-midway-games-for-spare-change-tax-benefit/

You think you got a good deal on an HDTV last week? Talk to Mark Thomas, who just picked up videogame company Midway games for 99 percent off on Friday. The seller: Sumner Redstone, who is desperately trying to sell off everything except his shares in CBS and Viacom in order to restructure a looming debt load. 

First email I saw this morning:
http://www.edge-online.com/news/midway-sold-00012-share

Gameindustry.biz coverage:
http://www.gamesindustry.biz/articles/redstone-sells-midway-for-100-000

 

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Mon, 20 Oct 2008 20:53:00 -0700 Midway getting crunched http://wangtang.posterous.com/midway-getting-crunched http://wangtang.posterous.com/midway-getting-crunched

Midway Games Backer Sees Credit Crunch, Possible Ramifications

Midway Games Backer Sees Credit Crunch, Possible Ramifications A credit crunch surrounding media mogul Sumner Redstone may cause considerable problems for publisher Midway Games (This Is Vegas), in which Redstone owns over 85 percent of stock through his companies National Amusements and Sumco.

Last week, National Amusements, which is privately owned by Redstone, sold $233 million worth of shares of its stock in CBS and Viacom at only 60 percent of the value it was targeting.

It was then revealed that National Amusements is attempting to refinance $1.6 billion in debt -- currently, the company is facing a December deadline to repay $800 million of that sum, leading some to connect the stock sale and the impending loan issue.

Much of the blame for the company's troubles has been placed at the feet of Shari Redstone, Sumner Redstone's daughter, who serves as president of National Amusements (as well as chairwoman of Midway's board of directors) and whose movie theater chain expansion is said to have been extremely costly.

But, according a Los Angeles Times report and another game-specific story by Variety, this may not tell the whole story, and there may be knock-on effects to Midway in the longer-term.

The publications report that significant cash infusions from National Amusements have been needed to keep perpetually-ailing Midway in business, with amounts estimated to be up to $130 million. Midway recently disclosed a $40 million loan from NAI in order to manufacture and ship their holiday titles.

Furthermore, family conflict may be exacerbating the problem -- a loan was taken for a $240 million settlement payout to Sumner Redstone's son Brent.

Meanwhile, Shari Redstone and her father have notoriously long been said to be in continued disagreement about Midway's direction. Since 2005, Shari Redstone has controlled National Amusements' investment in the publisher.

Midway's shares have plummeted since climbing to $23.25 at the end of 2005, and have traded under $3.00 for nearly all of 2008; the stock closed today at $1.03. Gamasutra will update as more information about possible effects on Midway's financing come to light.

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Mon, 20 Oct 2008 10:39:00 -0700 Retweets http://wangtang.posterous.com/retweets http://wangtang.posterous.com/retweets
Some good links in the past week.

Vinod Khosla - VC interview about the next boom:

Paul Graham - Why to start a Startup in a bad economy:

Andrew Lahde - Fuck you Wall Street.
also here:
and since it is so compelling, I'm posting it here:

Today I write not to gloat. Given the pain that nearly everyone is experiencing, that would be entirely inappropriate. Nor am I writing to make further predictions, as most of my forecasts in previous letters have unfolded or are in the process of unfolding. Instead, I am writing to say goodbye.

Recently, on the front page of Section C of the Wall Street Journal, a hedge fund manager who was also closing up shop (a $300 million fund), was quoted as saying, "What I have learned about the hedge fund business is that I hate it." I could not agree more with that statement. I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.

There are far too many people for me to sincerely thank for my success. However, I do not want to sound like a Hollywood actor accepting an award. The money was reward enough. Furthermore, the endless list those deserving thanks know who they are.

I will no longer manage money for other people or institutions. I have enough of my own wealth to manage. Some people, who think they have arrived at a reasonable estimate of my net worth, might be surprised that I would call it quits with such a small war chest. That is fine; I am content with my rewards. Moreover, I will let others try to amass nine, ten or eleven figure net worths. Meanwhile, their lives suck. Appointments back to back, booked solid for the next three months, they look forward to their two week vacation in January during which they will likely be glued to their Blackberries or other such devices. What is the point? They will all be forgotten in fifty years anyway. Steve Balmer, Steven Cohen, and Larry Ellison will all be forgotten. I do not understand the legacy thing. Nearly everyone will be forgotten. Give up on leaving your mark. Throw the Blackberry away and enjoy life.

So this is it. With all due respect, I am dropping out. Please do not expect any type of reply to emails or voicemails within normal time frames or at all. Andy Springer and his company will be handling the dissolution of the fund. And don't worry about my employees, they were always employed by Mr. Springer's company and only one (who has been well-rewarded) will lose his job.

I have no interest in any deals in which anyone would like me to participate. I truly do not have a strong opinion about any market right now, other than to say that things will continue to get worse for some time, probably years. I am content sitting on the sidelines and waiting. After all, sitting and waiting is how we made money from the subprime debacle. I now have time to repair my health, which was destroyed by the stress I layered onto myself over the past two years, as well as my entire life — where I had to compete for spaces in universities and graduate schools, jobs and assets under management — with those who had all the advantages (rich parents) that I did not. May meritocracy be part of a new form of government, which needs to be established.

On the issue of the U.S. Government, I would like to make a modest proposal. First, I point out the obvious flaws, whereby legislation was repeatedly brought forth to Congress over the past eight years, which would have reigned in the predatory lending practices of now mostly defunct institutions. These institutions regularly filled the coffers of both parties in return for voting down all of this legislation designed to protect the common citizen. This is an outrage, yet no one seems to know or care about it. Since Thomas Jefferson and Adam Smith passed, I would argue that there has been a dearth of worthy philosophers in this country, at least ones focused on improving government. Capitalism worked for two hundred years, but times change, and systems become corrupt. George Soros, a man of staggering wealth, has stated that he would like to be remembered as a philosopher. My suggestion is that this great man start and sponsor a forum for great minds to come together to create a new system of government that truly represents the common man's interest, while at the same time creating rewards great enough to attract the best and brightest minds to serve in government roles without having to rely on corruption to further their interests or lifestyles. This forum could be similar to the one used to create the operating system, Linux, which competes with Microsoft's near monopoly. I believe there is an answer, but for now the system is clearly broken.

Lastly, while I still have an audience, I would like to bring attention to an alternative food and energy source. You won't see it included in BP's, "Feel good. We are working on sustainable solutions," television commercials, nor is it mentioned in ADM's similar commercials. But hemp has been used for at least 5,000 years for cloth and food, as well as just about everything that is produced from petroleum products. Hemp is not marijuana and vice versa. Hemp is the male plant and it grows like a weed, hence the slang term. The original American flag was made of hemp fiber and our Constitution was printed on paper made of hemp. It was used as recently as World War II by the U.S. Government, and then promptly made illegal after the war was won. At a time when rhetoric is flying about becoming more self-sufficient in terms of energy, why is it illegal to grow this plant in this country? Ah, the female. The evil female plant — marijuana. It gets you high, it makes you laugh, it does not produce a hangover. Unlike alcohol, it does not result in bar fights or wife beating. So, why is this innocuous plant illegal? Is it a gateway drug? No, that would be alcohol, which is so heavily advertised in this country. My only conclusion as to why it is illegal, is that Corporate America, which owns Congress, would rather sell you Paxil, Zoloft, Xanax and other additive drugs, than allow you to grow a plant in your home without some of the profits going into their coffers. This policy is ludicrous. It has surely contributed to our dependency on foreign energy sources. Our policies have other countries literally laughing at our stupidity, most notably Canada, as well as several European nations (both Eastern and Western). You would not know this by paying attention to U.S. media sources though, as they tend not to elaborate on who is laughing at the United States this week. Please people, let's stop the rhetoric and start thinking about how we can truly become self-sufficient.

With that I say good-bye and good luck.

All the best,

Andrew Lahde

More on the economy:

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Fri, 26 Sep 2008 00:12:45 -0700 JPMorgan to buy WaMu - Sep. 25, 2008 http://wangtang.posterous.com/jpmorgan-to-buy-wamu-sep-25-20 http://wangtang.posterous.com/jpmorgan-to-buy-wamu-sep-25-20 http://money.cnn.com/2008/09/25/news/companies/JPM_WaMu/index.htm?postversion=2008092519&iref=topnews


Sent from my iPhone

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