Three Recent Activist Moves By Carl Icahn and Other Fund Managers

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As stated by a separate 13D filing, Eric Semler’s TCS Capital Management owns 16.31 million shares of Central European Media Enterprises Ltd. (NASDAQ:CETV), amounting to 12.0% of the company’s outstanding common stock. This compares with the 14.79 million-share position disclosed through TCS Capital’s initial 13D filing on the company, which we discussed in November. On November 18, Eric Semler sent a letter to the company’s Chairman and Board of Directors, “urging the Board to hire a financial advisor to explore a sale” of the company. As stated by the letter, TCS Capital believes that the poor stock performance of this media and entertainment company has been mainly attributable to Time Warner Inc. (NYSE:TWX)’s 75% equity and debt ownership in the company, along with the company’s failure to refinance the debt held by Time Warner. Central European Media Enterprises Ltd. (NASDAQ:CETV) pays interest rates “as high as 15% on nearly half of its debt”, which is “inconceivable today given the low bond yields in Europe”. Moreover, TCS Capital believes that the company should be valued at roughly $4.75 per share, which yields an upside of at least 73%.

Shares of this media and entertainment company that operates in Central and Eastern Europe are down 15% for the year. In the meantime, the number of smart money investors with stakes in the company dropped to eight from ten during the September quarter, whereas the value of these stakes climbed to $55.20 million from $43.06 million quarter-on-quarter. The shares owned by those ten hedgies account for 18.80% of the company’s outstanding shares. Rob Citrone’s Discovery Capital Management reported owning 4.70 million shares in Central European Media Enterprises Ltd. (NASDAQ:CETV) through its latest 13F filing.

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