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Non-Tech : Special Situations Value Investments

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To: NikhilJog who wrote (5)	11/13/2011 7:19:35 PM
From: J Mako	Read Replies (1) of 7

re: SLE I still don't follow the logic. If you think the split up will unlock the value, that I can understand. However, look at the special dividend alone, I don't see the supply/demand dynamics you saw. Say, an investor wants to buy SLE after ex-div. He will see $3/share has gone from the balance sheet. So, his willingness to pay for the stock will be $x-3. Whether there is a buyback in place or other institutions are holding onto the stocks doesn't play a role in his assessment in the value. The factors you mentioned may reduce the supply of the stocks. But the demand side will move the bid price to $x-3. That said, the spinoff alone may be of some interest. Do you have any opinion on businesses of the span-off business units? p.s. I saw your blog but haven't got the time to look at your posts yet.

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