Nov. 1, 2002 MCDT/A combination date
A message to McData investor relations about a vote to combine MCDTA and MCDT got the following response:
"For EMC to have a tax free spin ruling from the IRS, the 2 classes of stock must remain separate through October of 2002. Please let us know if you have any other questions."
Investor Relations
McDATA Corporation
investor_relations@mcdata.com
(anyone can email McData to verify)(For those wanting to verify that investor_relations@mcdata.com (above) is the correct email address to contact McData, please go to this part of the McData website:
mcdata.com )
Conclusion:
In only 18 1/2 months (Nov. 1, 2002), MCDTA and MCDT can be combined into one stock class without jeopardizing the taxfree status of the MCDTA spinoff from EMC on Feb. 7, 2001.
This means MCDTA will very probably sell for at least the price of MCDT by Nov. 1, 2002, if for no other reason that there is likely to be a vote to effect such a combination.
MCDTA stockholders will vote to combine unless MCDTA is selling for at least the price of MCDT. MCDTA stockholders, having 97% of the votes, will control the vote outcome (MCDT stockholders will have the other 3% of the votes).
mcdata.com
mcdata.com
With MCDT selling for about 14% more than MCDTA, a good strategy to profit from the upcoming vote to combine (or avoid negative consequences of it) would be to sell MCDT and buy MCDTA.
Those establishing or adding to their existing McData stockholdings should buy only MCDTA, avoiding MCDT.
Buying or holding MCDT instead is effectively a short term play on a short squeeze which is bound to disappear over time, making it "swimming against the (18 1/2 month) tide" risky. |
