H-P merger votes for sale on EBay
By Mike Tarsala, CBS.MarketWatch.com
Last Update: 3:27 PM ET Feb. 22, 2002
PALO ALTO, Calif. (CBS.MW) -- The going price for 1,000 proxy votes on Hewlett-Packard's plan to buy Compaq is $69 on EBay.
A seven-day offering through the online auction site promises to vote about 1,000 shares, representing 0.000052 percent of H-P's stock, whichever way the highest bidder says. The auction began Wednesday and has generated 29 bids as of Friday afternoon.
"Neither side wants to lose," says the auction's online advertisement. "This vote could be so close that only a few votes could determine whether the merger is approved or not. I control more than 1000 shares. That could easily determine which way the vote goes. I am hereby selling my proxy votes to the highest bidder."
Pending regulatory approval, the $20.4 billion merger is to be decided by a shareholder vote in Cupertino, Calif., on March 19. See "Barrage in the Garage," our special report on the merger plan.
The share seller, who has an e-mail name of Jim Smith, claims to own the H-P shares, and says he fully intends to go through with any deal. He did not reveal his identity.
The selling of votes online isn't breaking any federal laws, as long as purchasers are not defrauded in the transaction, according to the Securities and Exchange Commission.
"The federal disclosure issues arise when you are soliciting a proxy," said Martin Dunn, associate director of the SEC's corporate finance division. "The question of someone selling their vote isn't the same as soliciting a proxy. So it really comes down to state law."
One bidder, a man who says he's a retired 15-year H-P employee and an ex-employee of the H-P spin-off Agilent Technologies (A: news, chart, profile), says he bowed out of the bidding at $20.
"I've wasted more than $20 in the past on stupider things," said "StuffMan," who lives in Novi, Mich., and asked that he be identified only by his EBay (EBAY: news, chart, profile) screen name. "I am very against the merger, and my unofficial informal poll of current H-P employees shows that the majority are also against it."
An H-P poll suggests that employees support management's plan to buy Compaq, while a poll conducted earlier this week sponsored by David Woodley Packard, son of H-P co-founder David Packard, said the opposite.
Shares of H-P (HWP: news, chart, profile) lost 49 cents to $18.97 in mid-session trading on the Big Board, while Compaq (CPQ: news, chart, profile) shares lost 28 cents to $10.01.
Mike Tarsala is a San Francisco-based reporter for CBS.MarketWatch.com. |
