One huge marketing blitz is playing out Friday on the Street, as dealers scramble to move more than $900-million of Magna International shares for Russian billionaire Oleg Deripaska.
Mr. Deripaska, who may not be a billionaire any more, is selling a Magna stake he bought last year for $1.54-billion after seeing his loans called by creditors back in Russia.
This, folks, is what a credit crunch looks like. The football club-buying, mega yacht-owning oligarchs are feeling the pinch.
Mr. Deripaska's Magna stake is being sold in what's known as a marketed transaction. Dealers canvas institutional investors to gauge their interest in the stock, find a price at which the whole huge block can be moved, then move the block. The plan is to price these Magna shares before markets open on Friday.
Obviously, money managers use their considerable leverage in these situations to push for the largest possible discount.
That can only add to Mr. Deripaska's pain. An investor labelled Russia's richest man last year by Forbes was already facing a $600-million loss on this position. Magna closed Thursday at $45.59 on the New York Stock Exchange, so Mr. Deripaska's 20 million Magna shares were worth $911.8-million, well off that $1.54-billion purchase price last year.
