Lions Gate Insiders From Summit Cleared To Sell (LGF)

Lions Gate Entertainment Corp. (NYSE: LGF) may have enjoyed a serious rally tied to The Hunger Games sensation, but the company has just filed to allow securities holders from a private placement in early 2012 to register their securities.

The company’s Lions Gate Entertainment Inc. issued the 4% notes in a private placement in January 2012 and Lions Gate Entertainment Corp. issued 5,837,781 common shares in connection with the acquisition of Summit Entertainment, LLC in January 2012.  Summit is the group which was tied to the Twilight saga.

The notes are convertible into common shares of Lions Gate at the option of the holder any time before maturity and the conversion price was approximately $10.50 per common share subject to adjustment in certain circumstances.

The company noted, “We will not receive any proceeds from the sale by the selling securityholders of the notes, the common shares issuable upon conversion of the notes, or the Summit Shares.”

Lions Gate shares are up 3.2% at $12.22 and while today’s filing could increase the float this is one of those instances which should have been fairly easy to assume was coming.  It is also worth considering that just because the shares can be sold that they might not be sold, and those notes may not all be converted into stock even though the profit is there.  After all, this stock was under $10.00 in January and it has rallied as high as over $15 going into the launch of The Hunger Games.

JON C. OGG