Gemstar Intl (GMST) Message Board

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Technology Stocks : Gemstar Intl (GMST)

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To: Mike Buckley who wrote (3491)	7/29/2000 8:44:53 AM
From: Allegoria	Read Replies (2) of 6516

Mike...what am I missing? Owners of TV Guide shares received .6573 shares of Gemstar stock for each share of TV Guide stock or a total of 207.4 million shares. Before the merger with TV Guide, GMST has 201.3 million shares outstanding. Now, with the TV Guide merger, GMST will have approximately 400 million shares outstanding. Therefore the TV Guide merger will therefore dilute the equity of current GMST holdings by approximately 50%. Added to this dilution is over $600 million in TV Guide debt that Gemstar shareholders will now service along with a very large amount of goodwill created by the merger transaction. This goodwill will wipe out GAAP earnings completely into the foreseeable future. From my DD it appears that this dilution is going to kill EPS comparisons going forward. Any concerns or comments? Good luck, Eric

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