Remember James D. Dondero, the Highland Capital Management L.P. honcho who made Motient Corp. want to forget 2006 and all the fun that comes with nasty proxy fights and lawsuits?
Dondero has some folks scratching their heads about why he sold 93,000 shares of Leap Wireless common stock at between $85.18 and $85.68 at a time when Wall Street is gushing unlimitedly about Cricket’s core fundamentals and future prospects. The target price was up to $105 last time I checked. It may well go higher, seeing that Leap could be next in line to be acquired after Alltel Corp.’s $27.5 billion sale to two private-equity firms.
Dondero may know better than anyone about the Leap landscape; he’s a director of the company. Meantime, Dondero’s Dallas-based hedge fund owns 14% of Motient Corp., which is a controlling shareholder of TerreStar Networks Inc. and TerreStar Global Ltd., and a shareholder of SkyTerra Communications and Mobile Satellite Ventures LP. They’re part of the mobile satellite crowd.
Dondero gave Motient fits last year, accusing the company of gross mismanagement and improprieties infinitum. Dondero failed, however, to get a new, larger slate of directors elected to Motient’s board.
So why did Dondero sell 93,000 shares of Leap? Who knows? It’s not like he was bailing out or anything like that. Dondero’s May 25 filing with the Securities and Exchange Commission shows him having after-sale indirect ownership of nearly 4.6 million shares and direct ownership of 32,864 shares of Leap stock.
Four days before Dondero’s SEC filing on the Leap stock sale the Department of Justice and Federal Trade Commission announced Dondero agreed to pay a $250,000 fine to settle charges that he violated antitrust pre-merger notification requirements in connection with exercising options in February 2005 to acquire 10,000 shares of Motient stock. That stock buy combined with Highland’s existing holdings in Motient put total ownership at more than $90 million, or beyond the $50 million threshold for antitrust pre-merger reporting. The agencies said Dondero was guilty of the same filing oversight less than a year before regarding another company.
It’s all probably just coincidence.
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