Sorry to be so tardy in response but,
Since you make the most sense
You must have me confused for someone else...
My post was an observation of what the market may be saying, not my opinion on the Post DDay value of COMS and PALM.
Here is my opinion:
I agree with everyone here that PALM will continue to be successful and the price will rise over the long term. It may come down temporarily at times over the near term for various reasons but in the long run I expect it to be higher next year.
I don't know what to expect of COMS price in the future. I personally would like the opportunity to sell above 15. We may or may not get that in the near term. Either way I don't feel comfortable holding COMS. I believe it will be available at these prices or less at some time in the next few months so I'm in no hurry to own it.
Your situation:
You may be misunderstanding your situation.
my 400 shares of COMS ....
1.484 PALM I receive for each COMS I have...
it seems I'll be stuck post-distribution with 400 COMS valued at about $10 to $15 a share and 590 PALM valued at about $20 to $30 a share. Between two I'd have about appx. $22k in value
First, your math seems incorrect.
You end up with 400 shares of COMS at $13 (lets use that price for now) worth $5,200 and 593 shares of PALM at $41 (approx friday close of PALMV) worth $24,313. Total $29,513.
It seems to wait post-distributution would put me back to risking the total of value of my COMS and PALM declining back down to the $15,000 range.
I don't expect PALM to drop to levels that would see your $29K becoming $15K unless the overall market implodes. It could happen but thats not the way I'm betting.
On top of all this, I bought some COMS on margin and I owe the brokerage $8,000. So if post-distribution COMS dives to $20 in value, well, it's margin call time. True, $4000 margin call is not much, it's just the principle of the thing.
Is this a different set of COMS or included in your 400 shares? If different, remember you are getting PALM for those shares too. A margin call would not occur by COMS going slightly lower if you keep your PALM (and it stays here or moves higher). If the prices for Post DDAY PALM and COMS both go down dramatically then you might see a margin call.
Most likely all the shares of all companies you own are in the same account as your margin account, therefore they all count against your margin balance which should keep you from getting a margin call. |
