Stan Lee Media Stock Crash Finds a Co-Founder Selling Under

Margin Pressure
Ben Berkowitz
12/5/2000 20:20

The embattled stock of animation studio Stan Lee Media took another major dip Tuesday, even
as the company filed documentation indicating a large insider share sale stemming from a margin
call made last week on an entity controlled by co-founder Peter Paul.
According to a Form 144 filed with the Securities and Exchange Commission Tuesday, PFP
Family Holdings sold 171,500 shares of Stan Lee Media last week, or approximately five
percent of its holding. PFP Family Holdings, according to previous Stan Lee filings with the SEC,
counts as a managing partner Paul, who co-founded the company. PFP is the second-largest
shareholder in the company, behind Lee himself. The company's most recent annual report
indicated that PFP owned 3.2 million shares in the company, or 27 percent. A recent 11-for-10
stock split would have adjusted that total.
Stan Lee CEO Ken Williams said Paul's margin call ''certainly has nothing to do with today's
further slide in the stock.'' As with last week's sudden and unprompted declines, Williams had no
firm reason the dip occurred. Margin calls like the one made to Paul are becoming increasingly
common as Internet stocks get battered by the market and insiders who bought their shares on
margin are forced to make good.
The stock, which took a major hit early last week, losing almost 75 percent of its value from Nov.
24 to Nov. 28, closed today at 7/8, down 11/16 (44 percent of its value). It has traded at two to six
times average volume consistently over the last week-and-a-half.
This transaction is the fourth major insider sale recorded since the stock began dropping, though
not all of those transactions actually took place before the decline began. An entity called
Celebrity Enterprises entered a 100,000-share sale on Nov. 28, though the transaction took
place Nov. 9; one Blake Lindquist sold 25,000 shares on Nov. 27 and recorded Nov. 29; and a
Keith Nowak sold 77,800 shares on Nov. 20, and recorded on Nov. 30. The company, which is
63 percent owned by insiders, has approximately 13.5 million shares outstanding.