Miles Nadal, the former MDC Partners CEO recently dropped another 1.842 million shares of his former company’s stock, leaving him with just 7.5 percent ownership in the endeavor. And he wants even less. Apparently, he’s not the only one.
But, even as Nadal’s interest in MDC is falling, other organizations are becoming very interested in the disgraced former chief executive. The Securities and Exchange Commission is in the midst of an ongoing investigation of MDC looking into allegations of improper accounting and shady trade deals at the firm. Nadal’s name features prominently in the investigation to date.
Those allegations did not keep Nadal from offloading the stock, earning nearly $38 million in the process. Meanwhile, MDC earnings are in the tank, with the company posting a loss of $8.6 million in Q3 of 2015 … nearly double its losses from the same quarter last year.
Miles Nadal Profiting during SEC Investigation from PR Firm MDC Partners
If there is anything Nadal can say in his defense, it’s that he already agreed to return more than $20 million in fraudulent expense claims. Since he has already begun to do so, it stands to reason he means it. In the S&E filing, Nadal admitted he plans to continue offloading MDC stock when he can. That could take a while, considering he still owns 3.82 million shares of Class A stock. But expect him to wait. Investors have already reacted to the dismal Q3 showings, sending MDC stock down 1.5 percent.
In the wake of this, Zacks downgraded shares from “hold” to “strong sell”. They were not the only analysts suggesting it might be a good time to look for a buyer, indicating market watchers don’t expect any fortuitous rebounds from MDC any time soon.
If the current leadership wants to prove their public relations prowess, they need to turn this trend around, change the minds of the analysts and get investors buying again. If anyone’s interested, we hear there’s a guy in Nassau with some shares he’s looking to offload.