Roger's 1997 Short Picks Message Board

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Strategies & Market Trends : Roger's 1997 Short Picks

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To: Pancho Villa who wrote (6551)	11/6/1997 4:36:00 PM
From: Ben Graham	Read Replies (4) of 9285

Consider the following scenario: IPIC transfers all projects of value into Intercardia. IPIC then spins off Intercardia to shareholders (of course officers and directors of IPIC are major stockholders). IPIC then declares bankrupcy due to massive liabilities. The problem for IPIC shorts is we would have to purchase Intercardia shares in the market to pay this "stock dividend" on our borrowed shares. Do you have any thoughts on what Intercardia might be worth in this scenario? I am currently short IPIC but I am becoming concerned that such a sequence of events may be taking place.

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