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Technology Stocks : John, Mike & Tom's Wild World of Stocks
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To: John Pitera who wrote (1350)6/20/2000 4:13:00 PM
From: John Pitera  Read Replies (1) of 2850
 
How Not to Merge--Cramer on the CMRC-APPNET merger.
By James J. Cramer

Originally posted at 3:17 PM ET 6/19/00 on RealMoney.com



When companies merge, they should take a lesson from Commerce One (CMRC:Nasdaq - news) how not to do it.

This morning we saw a press release on Bloomberg that AppNet (APNT:Nasdaq - news) was getting a $13.8 million bid from Commerce One. Hold it! AppNet is a $1 billion company.

I am not kidding. "Commerce One to Buy AppNet for $13.8 Million in Stock." That was the headline. That's crazy. At 9:37 a.m. it was corrected: "Commerce One to Buy AppNet for $1.38 Billion in Stock." The announcement said that Commerce One had signed a "definitive agreement" to acquire AppNet.

Wrong again.

Amazingly, both stocks continued to trade. At 11:02 a.m., trading was halted in Commerce One. Not long after, Appnet issued a release saying there was no definitive agreement to merge with Commerce One.

By 1 p.m. Commerce One was denying the agreement.

Ladies and gents, this is not how business is done in this country. Both of these stocks should have been halted. No one should have been trading them. These companies' counsels should be ashamed of themselves. Whoever let this stuff out should be ashamed of themselves. Common sense dictates that you don't let people trade on bad information.

We want answers about why this happened. And apologies. Someone should 'fess up here and tell us what really happened. And someone should lose his or her job.

Because this was a disgrace.

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