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Strategies & Market Trends : TRACKING STOCKS AS BUYOUT CANDIDATES

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To: chalu2 who started this subject	4/14/2001 10:00:55 PM
From: Glenn Petersen	of 1

Cramer called NBCI. SPLN and MKTW are also on his list. thestreet.com Watch Out for Dot-Com Infanticide By James J. Cramer Originally posted at 2:14 PM ET 1/29/01 on RealMoney.com So Disney's (DIS:NYSE - news) cramming down the Disney Internet Group (DIG:NYSE - news). And the move is going to send shivers down the back of every stockholder of a subsidiary Web site owned by a major media parent. Disney's going to take 20 horrid days in trading, average them out, and give you a 20% premium to that price, which works out to 0.19353 shares of common stock as of March 20, 2001. In other words, they are cramming you down. They are capping your upside forever and getting rid of your stock. What does that mean for shareholders of Web sites in similar subsidiary situations, like NBC Internet (NBCI:Nasdaq - news), MarketWatch.com (MKTW:Nasdaq - news) and SportsLine.com (SPLN:Nasdaq - news)? (I've picked ones where there is a big-footed parent who owns a large stake in the company.) To me it means there is now a nasty precedent where the parent can clobber you when you run out of money. It says that the highest price you might get is 20% higher than where you are now. That said, we know that each of these situations is a bit different, with different percentages owned by the Big Daddy. Nevertheless, the analogy will not be missed by the likes of Mel Karmazin and Jack Welch. The Disney Internet crunching may be the perfect antidote for what to do with these sorry stubs.

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