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Technology Stocks : Rockwell-Spins off Conexant (CNXT)
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To: jas244 who started this subject9/14/2000 10:41:32 PM
From: greggcap  Read Replies (1) of 2013
 
Of course I am grateful to CNXT for making the spin-off announcement yesterday. I bought CNXT near its recent lows in August and happily sold it for a 90% profit today.

Now that I am no longer a shareholder and the emotion of the score has dissipated, I have begun trying to analyze why a company with the same assets, products and employees can almost double in value overnight. With respect to Mr. Taylor, I took a mental drive by Conexant headquarters today. Apart from glimpses of option rich employees high- fiving each other in the company parking lot, I saw nothing had changed.

It then occurred to me the actual spin won't occur until early next year, and then six months after that (God willing the IRS goes along) Conexent shareholders will get their tax free distribution of newly minted shares of MiniConex. Much can and will happen to the economy in the next nine months with there being no guarantee the economy will be as robust then as it is today. I guess I get a little worried when I hear of Europe's energy and currency crisis and how these woes are making a direct hit on the bottom line of American Multinationals such as McDonalds and Colgate Palmolive to name but a highly visible few.

So once the initial euphoria of Yesterday's announcement wears off and the company orchestrated short squeeze subsides, what happens to the share price?

Well I believe after the dust settles and the carcasses of the slaughtered nine million shorts have been given a decent burial, this stock might actually begin to drift lower over the next nine months. To that end, as of this evening in the after hours trading, I have begun establishing a short position.

gregg
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