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Crypto mogul Brock Pierce is trying to take control of the company that publishes Sports Illustrated, but was thwarted by management when he tried to sell a huge stake earlier this year, according to a lawsuit. Its value has since plummeted.
The Puerto Rico-based investor, who starred as Gordon Bombay in the Mighty Ducks series as a child and has since amassed a Bitcoin fortune of more than $1 billion, is a member of Arena Group. It claims to have purchased $17 million worth of convertible bonds. Additionally he owns numerous sites such as SI, Men's Journal and TheStreet.
Pearce's investment firm, Warlock Partners, bought up Arena stock at an average price of about $10 per share between 2020 and 2021, making it Arena's second-largest shareholder, Pearce claimed in an exclusive interview with The Post. did.
Nevertheless, Mr. Pierce, 42, alleges in a complaint filed last week in New York State Supreme Court that when he tried to sell his stock last year because the stock price was above $14, Arena and the company's CEO Ross claims to have been blocked. Levinson – former interim CEO of Yahoo, short-lived publisher of the Los Angeles Times, and former president of Fox Digital Media.
“Ross made a lot of excuses and gave me lip service,” Pierce said in an interview with the Post.
According to Pierce's complaint, “Defendants have committed delays, obfuscations, misstatements, and false statements that unreasonably prevent Warlock from acting on its rights as a shareholder and deprive him of the right to freely market Arena stock.” involved in a pattern of cooperation.''
Meanwhile, Levinson sold 82,861 shares on March 6 at a price of $7.08 per share, for a yield of $586,655.88, according to filings.
Arena's stock price was helped by the fact that Warlock was not allowed to sell stock on the market, the lawsuit alleges.
“Arena has caused Warlock significant trading losses, and as a result, Warlock is liable for tens of millions of dollars in liquidation and consequential damages,” the lawsuit claims.
A representative for Arena refuted Pierce's claims.
“We strongly disagree with the allegations in the complaint. The complaint contains fundamental errors, including the allegation that Mr. Levinson sold his shares in the company,” the spokesperson said.
“Since joining the company in 2019, Mr. Levinson has not sold any company stock. He has purchased stock and forfeited the stock pursuant to withholding.”
Arena was trading at $3.25 on Monday, giving it a market cap of $77 million.
Pearce said the stock price has been affected by a slowdown in digital advertising, and Arena has $118 million in debt.
A ruling in Pearce's favor could lead to stripping Levinson of control of Sports Illustrated, which publishes the annual swimsuit edition, and Arena's other publications, the crypto tycoon said. Stated.
“The company is not in a position to resolve this issue,” Pearce told the Post. “If we finally settle the matter with stock, I will be the largest shareholder.”
In August, Levinson agreed to sell a 65% stake in the company to Manoj Bhargava, founder of the caffeine brand 5-Hour Energy. The transaction has not yet been completed.
“We don't know if Ross has disclosed his liability. If it's not disclosed, this lawsuit could have a significant impact on the merger,” said Pierce, who is also a litigation associate at Quinn Emanuel. The company has appointed Alex Spiro (whose other clients include Elon Musk and Alec Baldwin) to lead the case.
Mr. Bhargava did not return calls.
Arena, formerly known as TheMaven, made headlines in 2019 when it reached a deal with Authentic Brands Group to publish Sports Illustrated. A few months later, Arena signed a deal to acquire TheStreet.com, co-founded by Jim Cramer, for $16.5 million. Cramer is no longer associated with TheStreet.
Pierce, a digital currency pioneer, has raised more than $5 billion for the companies he founded. He is the Chairman of the Bitcoin Foundation, EOS Alliance, Block.one, Blockchain Capital, Tether, Mastercoin (his first ICO), and his first physical NFT Smart Gallery, the Lighthouse NFT Smart Gallery. is the co-founder of
In 2020, Pierce ran for president as an independent and received just under 50,000 votes.
