Case buys 1 million shares of company
By Kim Chipman
Bloomberg News Service
NEW YORK — AOL Time Warner Inc. Chairman Stephen Case said he bought 1 million shares of the biggest media and Internet company this week. The stock rose 7.5 percent, the biggest one-day gain in more than four months.
Based on a closing price of $27.36, the purchase would be valued at $27.4 million.
The stock has fallen 44 percent in the past year and hit $23.60 Tuesday, the lowest since December 1998.
The Honolulu-born Case said the purchase shows he's confident the shares will rise. Case sold about $50 million in stock, or 1 million shares, a year ago after the price rose 43 percent. The sale, for financial planning reasons, left Case with 30.2 million shares and options, AOL Time Warner said at the time.
The purchase is "neutral at worst and possibly a slight positive," said Henry Ellenbogen, an analyst at T. Rowe Price, which owned 20.4 million shares of AOL Time Warner in September, according to federal filings.
AOL Time Warner, the owner of Warner Bros. movie studio and CNN cable television channel, had to cut its growth targets for this year and last because advertising sales fell more than expected. The company had a fourth-quarter loss of $1.82 billion on higher expenses and lower ad spending at its magazines, TV networks and America Online Internet service. AOL Time Warner has fallen 71 percent from America Online Inc.'s all-time high of $95.81 reached in December 1999.
"I find it reassuring that a chairman of the company would buy additional shares when he already owned" so many, said Charles Crane, a manager at Victory SBSF Capital Management, which has $4 billion in assets and bought additional AOL Time Warner shares earlier this year.
AOL Time Warner was formed last year when America Online Inc., the biggest Internet service provider, bought Time Warner Inc., the largest media and entertainment company.
Case co-founded America Online and has been chairman since October 1995. Former Time Warner Chief Executive Officer Gerald Levin became CEO of AOL Time Warner after the purchase.
Case retained his title of chairman and said he planned to focus on the company's long-term strategies and philanthropy.
Some investors said AOL Time Warner stock will begin rising when advertising revenue starts to rebound and the company is successful in selling high-speed Internet access, or broadband, services. Case has said the company will seek growth in part by expanding outside the U.S. and by creating new Internet-related products and services.
"AOL Time Warner is putting a strategy in place to enable us to ride the waves of convergence and globalization," Case said in his statement. He declined to be interviewed.
The chairman noted that the bulk of his "net worth is still tied to AOL Time Warner stock."
