Hard-sell Mel dumps shares

Karmazin sells 15% of his total holdings

NEW YORK — Viacom chief operating officer Mel Karmazin, always the consummate salesman in his efforts to steer investors into his company’s stock, has sold 700,000 shares or more than 15% of his total holdings, for roughly $35 million.

The sale of the Class B stock, which came to light in an SEC filing last week, was his first since joining the conglom last year when Viacom and CBS merged. It drew some fire from Wall Street, where Karmazin is known as an outspoken proponent of the stock. More than most other top entertainment execs, he’s also been consistently upbeat about an end to the current advertising slump that has hit the media sector. He often insists Viacom shares are undervalued at current levels and promises long-term rewards for investors who hold the course.

“He’s the one who was calling around to everyone with a $100 price target when the stock was at $75,” said one entertainment analyst.

After taking a beating this year, Viacom shares ended last week at $50.60. This makes it an unlikely time to sell and suggests that Karmazin, who has a reputation for being extremely frugal, wants the cash and, perhaps, that he doesn’t expect the stock to rebound dramatically anytime soon. A large insider sale doesn’t send the most positive message during an anxious period when investors are already skittish and looking for direction.

There was also speculation that the sale was related to rumored tensions between Redstone and Karmazin that circulated widely in high media circles. No one at Viacom was available to discuss the issue, however.

Karmazin is said to have owned nearly 4.5 million Viacom shares as of April, with options to buy 5 million more.

Viacom reps weren’t immediately available for comment on Sunday.