A stock conversion plan being explored by Charter Communications (Nasdaq: CHTR) would further reduce the influence of former chairman Paul Allen, according to a story in the Hollywood Reporter.
Allen, who made his fortune as co-founder of Microsoft (Nasdaq: MSFT), only owns about 5 percent of Charter these days, even though he poured billions into the MSO over the years. Through a quirk of Class B share ownership, however, the former chairman still has 35 percent voting power. Charter's board of directors is now considering converting those shares to less powerful Class A stock to even further dilute Allen's influence.
Charter has been on a rollercoaster ride since Allen first entered the business in 1999 and started pouring money into what some believed would be a showcase next-generation MSO. In 2007, he held a majority financial stake in a monetarily troubled business that in 2009 slipped into Chapter 11 bankruptcy. As it emerged from that, Allen was removed as chairman and replaced by Eric Zinterhofer.
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