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Technology Stocks : METHA Methode Electronics
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To: John Liu who wrote (84)1/5/2001 3:49:52 PM
From: opalapril  Read Replies (1) of 95
 
This whole thing has been an object lesson in why parent companies should avoid getting suckered by investment banks like Lehman Bros. into this partial IPO-spinoff nonsense. All it does is provide Lehman's partners, friends, cohorts, and like-minded hedge funds with an opportunity to make a killing at the expense of shareholders and employees with options.

As for the "rumors" what I can't understand is why one or another of the companies doesn't issue some sort of statement. The whole investment world seems to know of the Witt report; but nada from Methode.

Finally, there's the matter of the IRS approval pending. Until something happens on both fronts, the stock price remains extremely vulnerable to the short plays of arbitrageurs and FUD spread by the usual collection of shorts piling on. Indeed, I don't expect much of a recovery until the actual distribution date is upon us and the arbitrageurs move on to fresh prey.

Medium term, Methode has already warned earnings will be affected by any downturn in the auto industry although other aspects of the parent's business are said to be doing fine. STLW like other optics suffers from an inability or unwillingness to give greater clarity to future earnings forecasts beyond what was said at the last c-c. The c-c was pretty amateurish -- it was their first -- but they tried to convey a sense of continuing growth. A lot has happened since that c-c, though.
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