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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 71.08

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3:59 PM EST

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To: RetiredNow who wrote (66621)	11/29/2004 2:45:53 PM
From: Elroy	Read Replies (1) of 77397

OT - no one has posted on the MOT board for 5 months, so I'm going to ask this one here. On December 2nd MOT spins out its semiconductor division to its shareholders. The ratio is something like you get 0.11 Freescale shares for every MOT share you hold. So MOT stock should drop about $1.80 the next day. How do the options react? For example, with MOT at $19.30, the December MOT $20 puts are worth about 90 cents each. On December 3rd, MOT should fall $1.60 to, say, $17.70, so the $20 put should be worth at least $2.30. Does anybody know how an stock for stock spinout affect the options available to MOT. Any explanation would be appreciated. Elroy

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