'Funny Business' at AutoTrader.com Threatens Another IPO

June 19, 2012 2:22 PM EDT Send to a Friend
According to an SEC filing on Friday, AutoTrader.com (NASDAQ: ATG) will seek to raise $300 million in the first US IPO since May's Facebook (NASDAQ: FB) fiasco. But the deal is already coming under scrutiny.

Dan Primack of Fortune Magazine pointed out a peculiarity with a recent dividend payout at Autotrader.com. Apparently, six weeks ago AutoTrader insiders borrowed $400 million. Soon after, they turned around and pay themselves a one-time dividend of, surprise, $400 million.

According to reports, the transaction increased AutoTrader's long-term debt by 50 percent, and was paid out to pre-IPO shareholders including Cox Enterprises and two private equity investors, Providence Equity Partners and Kleiner, Perkins.


Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

IPOs

Related Entities

Providence Equity Partners, Dividend

Add Your Comment