Mr. Pink's Picks: selected event-driven value investments Message Board

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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments

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To: Mr. Pink who wrote (14450)	11/5/2000 2:07:27 PM
From: RockyBalboa	Read Replies (1) of 18998

Mr. P$nk, late November, Telekom Austria is supposed to hit the market; a total of about 100M shares is being sold, from that about 60M shares go to international investors. The revenues appear to go to former owner, a state holdings. The price band has been pushed down to as low as E9 to E13 (was up to E20 before), so the issue should gather some interest as it is comparably cheap. Many of the national celebs are pounding the table; I merely suppose that it is more the individual investor who is buying it. Besides the fact that TA does not grow in its fixed line activities (the market has been opened to competition about 2 years ago) and it not only covers the wireless activities (75% are held by TA), 25% by Telecom Italia, there is one small fact which is being often overlooked: Telecom Italia does not only hold 25% of affiliate Mobilcom, but 25% of the total entity; it bought the shares at a price of around E15.80 2 years ago. One small paragraph in the purchase agreement states that Telecom italia will get a rebate covering the difference once it should happen that shares are sold at a price below the E11.75 . Now the time the comparison takes place is the last trading day in December (2000), and the difference is being paid in additional Telecom shares, rather than cash. It is therefore possible that any selling pressure (if it the TMT sectors continue to be weak) will be exacerbated by targeted selling towards the date the price differential is measured.... TA will be traded in Europe, as well as on the NYSE...trading day appears to be Nov 25th

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