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Politics : Ask Michael Burke

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To: Skeeter Bug who wrote (67585)	9/13/1999 11:32:00 AM
From: Knighty Tin	Read Replies (1) of 132070

Skeets, this one is easy. When corps buy in mergers, they have to buy from households. Remember that institutions are just groups of households and I think you have it figured. So, when CBS and Viacom merge to form Pathetic.Dumb, half of the shareholders are taken out of their holdings of Viacom. And, as Barron's mentioned, they are getting smarter and demanding cash. Also worth noting, many concentrate on the fact that such mergers take shares out of the total. They neglect to mention that it also takes out investable cash. For example, Compaq would be a prime candidate to buy a tech co. except for the fact that they wasted their cash on DEC. Now they cannot make a major buy even if it looks good.

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