Forget holding the parent on some valuation oriented basis. Every backdoor IPO play has dropped after the spin, some loosing gas up to 4 days before, others holding up to the ipo date. its more a issue of number of buyers and sellers. Leading up to the spin everyone is crowding into the parent, rationalized based up valuation. Once the ipo goes the buying subsides and sellers outnumber buys with the stock dropping (MKTY, DLIA, MMWW, MALL, DBCC, BNYN, UCOMA, KLOC to name a few)....simply issue of supply and demand, little to do with valuation. At best the parent companies holding in a ipo is discounted in the range of 30-50%. Even the best ones (UCOMA) sold off after the spin taking about 4-6 weeks to shake the selling pressure.
Regards,
Mad2 |
