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Biotech / Medical : Biotech Derivatives
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To: RWReeves who wrote (397)9/15/1999 8:13:00 PM
From: LLCF  Read Replies (1) of 555
 
< You, as a minority shareholder can't actually get your hands on the cashflows. >

Actually we're all minority shareholders in everything we own... there is always risk that someone buys up like 75% of any company and lets us sit and rot with the rest. As usual I think management is very important not to let this happen... or in GZMO's case not to "stick it to us". That said, legally, we are absolutely entitled to NPV of expected cash flows.

<But the expectation that the share you hold could be sold to an acquirer and the acquirer could realize the actual cash flows would seem to be the underlying value- that's the essential function of an arbitrage market in equities.>

What you're saying here is that ONE way [takeover] of realizing value has been removed... there are of course others in an arbitrage market in equities...

<This just isn't there with a tracking stock.>

If THIS is the takeover, I agree... if your saying that the market place doesn't work with tracking stocks I disagree.

<But if GZMO was selling for a nickel tomorrow who could buy it and realize the underlying value? >

Me! :) Legally 'general' would owe my my portion of all products developed by the company... no way would 'general' screw with a minority shareholder IMO. But, that's just my take on this management.

DAK
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