Hey Capt! <<I hope the biggest run on PALM is in the first day or 2 of the IPO and COMS tracks it closely (it should).>>
-Playing devil's advocate: Let's assume PALM ipo real hot! So now the Q is, "What happens to COMS stock price???"
Couple of scenarios:
S-1. Assume COMS did not plan to SPIN PALM...Q: What would COMS be trading at today???? Let's say X dollars!
- Now with COMS about to spin off PALM, let's assume COMS has increased substantially BECAUSE of the IPO! So we can say COMS is now X + Y dollars (COMS value plus anticipated HOT IPO price!).
So for example, lets say that at the close just before IPO date COMS has reached $60. Hey, what the heck...I'm thinking positivelY!!!
Now, assuming this scenario, COMS could very well drop by 10%-20% (some percentage due to the spin of 20% of PALM shares) the very moment the PALM IPO goes public...
Asuming this scenario, COMS doesn't track the PALM stock...cause it will have factored in PALM in the increased/projected price of COMS...
S-2. PALM IPO stays cool...trading in first 1-2 days sees only 10-20% increase from original ipo price.... Result??? COMS sells off!
S-3. PALM IPO explodes and doubles within 1-2 days of trading...
In this case, COMS stock may very well increase some percentage - but not necessarily 100% step with rise in PALM due to previously factored in Y dollars or price of PALM by which the STREET had valued the PALM ipo in the first 1-2 days of trading.
Anyhow, my guess is that COMS will continue to move up GRADUALLY till IPO date, at which time, all bets are off - pending the TONE of the NAZ/tech market and reception of PALM IPO by Mr Street!
S-4. Feb 2-3 we can expect a 25 basis points interest hike!!!!
This can really muck up things (particularly if Mr Greenspan opens his mouth or tries to cool the market!) ..hopefully market will have discounted increase and teck stocks still breathing!
Fortunately, COMS doesn't have to spin remaining shares...EB ain't that stupid... this is his ace in the hole to ensure COMS stock doesn't tank. I'm expecting that COMS will distribute remaining Palm shares only when COMS has defined their business model and can show signs of some respectable growth in revenue.
In the meantime, it would behoove Mr EB and company to come up with some decent PR for COMS...I'm not sure if they can legally do road shows for PALM prior to ipo date!
Sorry if I've bored anyone,,,buy trying to be realistic...???
Comments???
(Captain, really hope you are right...good luck Feb 1).
FNS
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