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Technology Stocks : CMGI What is the latest news on this stock?
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To: AmericanVoter who wrote (18640)11/25/2000 12:05:35 PM
From: rocklobster  Read Replies (1) of 19700
 
Ok...Im going to take my best shot at this poison pill thing..someone correct me if I'm wrong....but basically this says that each Junior Participating is worth $100,000 and any acquirer would have to pay the value of the shares outstanding. so multiply the total possible number of junior participating shares times $100,000 each and this gives you a buyout value if someone were to try to takeover ICGE buy buying out the shares. Basically my read on this is that the conversion, should it be excercised, would dramatically increase the share value of the company, therefore prohibiting anybody from swallowing up ICGE in a hostile style takeover by simply acquiring as many shares on the public market as possible, and then making a bid for the rest at a modest premium to the current trading price.

Basically my read on this is that the board of directors feels that ICGE is worth dramatically more than what it is trading at right now.

So getting back to the question of why is one ten thousandth of a junior participating share worth $100. basically, my read on this is that each shareholder can protect a 10,000 share position with only a $100. this gives shareholders a fairly inexpensive way of protecting the upside potential of their investment in ICGE. Nobody wants to be taken out at a 10% or 20% premium on this stock when they feel the upside is far more than that.

rok
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