Businessweek Archives

The Bets Are Big Inside The Midway

Inside Wall Street


Insiders at Midway Games (MWY), maker of video games for coin-operated machines and home players such as Nintendo, Sony, and Sega systems, are placing big bets on their own stock. With Midway shares at 12--down from last year's high of 26, insiders, including Chairman and CEO Neil Nicastro and Executive Vice-President and Chief Financial Officer Harold Bach Jr., have been big buyers. Do they know something that outsiders don't?

"All we can say is the stock at these levels is a bargain," says Nicastro, who bought 100,000 shares in May and June at an average price of 13 1/4 apiece and another 20,000 shares in August, when the stock's price had slumped to 9 3/4. So far, he has accumulated 433,000 shares--or 3% of the 37 million shares outstanding.

Midway's largest investor is Viacom Chairman and CEO Sumner Redstone, who has a 25% stake. Redstone got the shares when WMS Industries--of which he owns 26%--spun off to shareholders in 1997 its 87% Midway interest. Nicastro says he has no idea if Redstone will buy more shares.

Midway itself is buying back shares: After repurchasing 1 million in August, it recently authorized buying another 1 million.

Analyst Robert Peterson of Piper Jaffray is also bullish on the stock: His 12-month target is 20, based on his 1999 profit estimate of $1.40 a share. With a p-e of 9, Midway is very attractive, vs. a p-e of 15 for its peers, he notes. Another plus: Midway's latest game, NFL Blitz, is expected to be a hit this Christmas, along with such mainstays as Mortal Kombat and Space Invaders.BY GENE G. MARCIALReturn to top

Return to top

Silicon Valley State of Mind

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

blog comments powered by Disqus