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Technology Stocks : CMGI What is the latest news on this stock?
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To: TimbaBear who wrote (15912)1/22/2000 9:23:00 AM
From: Mark Peterson CPA  Read Replies (2) of 19700
 
TimbaBear, I agree with your point of view pertaining to the additional value created that is attributable to CMGI's holdings in ENGA.

However, seems to me at first blush that they would prefer to use one of the provisions under the IRC that would permit this "reorganization" to occur on a tax-free basis, resulting in no additional taxable income or related tax detriment.

Seems to me that when ENGA's operating results and balance sheets are consolidated into CMGI (as all activities of 80% or more owned subsidiaries must be according to GAAP), the realized "gain" from this transaction would be offset through an eliminating consolidating entry, and, as a result, would appear not to be recognized for EPS purposes (after the consolidating adjustments).

But I've got to read through the SEC documents and the accounting treatments they propose there to be sure....

Mark
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