Dear K.:
3COM is purchasing USRX, and USRX will afterward not be the same USRX as before; it will be wholly owned by 3COM shareholders (which will then also include all former USRX shareholders) and thus will become part of 3COM. USRX shareholders are the only ones affected because their company is "going away". You will keep your COMS shares, you will not be given USRX shares, since USRX will become part of 3COM and will no longer exist seperately. So, you will actually own not only your portion of 3COM, but also, a portion of USRX, according to the number of shares you hold, since USRX will be absorbed into 3COM. It is the USRX shareholders who must obtain new share certificates, and they will be instructed how to do that when the merger is official.
The idea, theoretically, is that the combined value of the two companies makes the deal worth doing over the long haul, but costs a lot for the time being. The number of total shares in the hands of shareholders increases substantially because of all the shares issued to USEX in exchange for their stock. Eventually, the share price will go up again if the company performs well. However, the market rises and falls on its own rules, and rarely follows what "ought" to happen, so the share price initially fell and will take time to recover, or, if things don't go well for "3COMIX" or whatever it is called now, it will move to a price which reflects that, as always.
I hope that answers your question; I could have simply said "NO" but thought I'd throw the rest in, to.
regards,
larry |
