Re: Danger of Softbank NASDAQ listing from US regulations.
This is a very good point. Indeed, the stock will get a bang from a NASDAQ listing and I still anticipate that there will be an announcement along these lines in 6-12 months.
But our antiquated securities statutes throw a wrench in these plans. Hmm, we've already seen our trusty american regulators try to block the ETrade Telebanc merger, which was a nightmare for Softbank.
As I briefly mentioned in this post on the Divine InterVentures thread:
Message 12588532
, the Investment Company Act of 1940 is a big roadblock for any publicly-traded VC stocks. I believe some regulations can be skirted if a security is structured as a closed-end fund, as the forthcoming meVC.com will be. Basically, our regulators think stocks like CMGI, ICGE, and maybe SFTBF are nothing more than mutual funds in disguise and thus are subject to absolutely onerous regulation. If these companies hold a certain proportion of assets (at least 40%) as a non-controlling stake in other entities, it's a "mutual fund".
Of course this law may have been sound in 1940, but it gives no consideration to this new generation of companies. These zaibatsus and keiretsus are not merely passive mutual funds. CMGI was going to get slaughtered, which is why they finally just took the plunge and purchased Altavista outright. Hitherto, they were granted an extension by regulators from being penalized as a mutual fund in disguise, but when their time ran out, CMGI finally made the purchase to become an OPERATING COMPANY. I don't know if it's feasible for Softbank to do the same and purchase companies like Yahoo! outright.
The Divine InterVentures SEC filing repeatedly (nearly 10 times) warns about the threat that the Act of 1940 poses to their business model. These incubator companies are taking heart in the fact that ICGE was granted a 1-year extension by regulators, but when the clock runs out, it's unclear if this anachronism plaguing our capital market will be addressed or if ICGE will have to buy VerticalNet or something as outlandish.
- Netconductor.com
>>Edwin S. Fujinaka wrote:
Malcolm,...I was hopeful that the switch to a "holding company" status might have helped their tax status somehow,
but I don't have a clue in reality. How does CMGI get around that tax problem? I know that I have several closed
end country funds that pass on some pretty hefty capital gains liabilities to me at year end.
In the absence of a US Exchange traded stock category, we may be stuck with "only" last year's market
performance <G>.
I am not as optimistic as Jay (or Michelda) but I would be happy with 400K for the year 2000. I don't know how I
can say that with a straight face since I can remember the days when I would have been happy with a 50% gain for
the year for any one stock and a 20% gain for the year from my portfolio. I realize that many people on the internet
are used to these triple digit gains, but I'm not confident that we can expect that into the indefinite future. |
