If PALM hits $52+ after the IPO, COMS will get close or over $100. The numbers don't lie.
Numbers don't lie, but I will tell you right now that if you rely on those calculations, you will be sorely disappointed.
Historically, parent companies' retained holdings in their IPO spinoffs are reflected in their own market caps at a steep discount to the IPO's market cap. For example, IDTC holds 55% of NTOP, a company valued at about $2.2 billion, so their holdings in NTOP should mathematically be worth about $1.2 billion. Yet, IDTC trades at a market cap of only $725 million. IDTC minus NTOP may not be worth much, but it's not worth a negative $475 million. Similar disparities can be seen the valuations of ECMV and PF, to a lesser extent in BKS and BNBN, and in many other such parent/spinoff pairs.
By all means hold on to COMS (I am), just don't get overinflated expectations from the apparent straightforwardness of the math. |
