MAMA Stock Bounces Back

Brirtish music and media company MAMA Group’s clearly not concerned about its share price dipping nearly 20 percent to 3.7 pence in a matter of hours and then bouncing back to 4.5p, as it was a short lived blip and some of the company’s investors appear to have profited from it.

MAMA co-chief exec Adam Driscoll told Pollstar one finance house wanted to close its position and dumped more than 30 million shares on the market, pushing the price down in the process.

He says other MAMA shareholders were happy to pick them up and the price was soon restored to 4.5, which meant they’d made a handsome potential profit in a matter of hours.

After opening on the London Stock Exchange’s Alternative Investment Market (AIM) at 4.5 pence Nov. 10, the company saw its stock plummet 17.8 percent to 3.7p.

More than 30 million shares were traded during the course of the day, but the company’s issued share capital is more than 800 million.

MAMA has made major acquisitions including buying some former Mean Fiddler Group venues from Live Nation-Gaiety Investments and then let music retailer HMV take a 50 percent share in them for £18.245 million ($30 million).

Despite a 173 percent increase in revenues from £12.24 million to £44.51 million, year-on year net income has fallen from a gain of £531,000 to a loss of £1.27 million.

In 2008 MAMA had negative cash flow and 2007 was the only one of the last five years the group showed a profit.

Driscoll’s confident the next end of year balance sheet will be more positive. The company has record label interests, a portfolio of about a dozen UK venues and a management company that reps Kaiser Chiefs and Franz Ferdinand.

The major shareholders include – or have recently included – SMS Finance, Pacific Capital S.a.r.l., Goldman Sachs Group, BNY (OCS) Nominees Limited, Chase Nominees Limited, Lynchwood Nominees Limited and Driscoll.

Earlier in the year, SMS Finance S.A. bought Pacific Capital’s 26.3 percent stake.

Pacific Capital had earlier made a provision for up to £10 million ($16.5 million) worth of debt funding to strengthen the balance sheet and provide MAMA with “greater financial flexibility going forward.”

A week ago it was strongly rumoured the company’s The Fly venue in London’s New Oxford will close and that staffers have been given notice, although the venue’s Web site is still showing a full programme through to 2010.