The New Qualcomm - a S&P500 company Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : The New Qualcomm - a S&P500 company

QCOM 177.78

-2.2%

Jan 9 9:30 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: DaveMG who wrote (3698)	11/27/1999 9:34:00 PM
From: Cooters	Read Replies (2) of 13582

<<Issuing tracking stock isn't the same as selling the business is it?>> This isn't the easiest thing to explain in less than 30 minutes, but I'll try. A tracking stock represents the right to receive the fruits(dividends would be an example) of the business being tracked. The parent retains ownership and control over the business. The ownership issue is too complicated to explain in its entirety here, so let's try to concentrate on just one part of it. A suitor could not buy the business being tracked unless the parent agreed, and then it would be treated as a sale of a division, with all related tax consequences. For investment purposes, the tracked business has some of the same attributes as a separate(spun-off) business. This includes an IPO or subsequent share issuances, but the new owners of these shares have the same ownership and control issues as explained above. There are a ton of conflicts of interest created with a tracking stock and I expect over the course of many years these may even result in a reduction or ban on the idea. For now, they are mainly used to either separate businesses which confuse investors and thus harm the value of the combined entity, or to break out losses in an emerging business and allow both the old and new business to better reflect value in relation to the peers of each. Did this help? Cooters

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next