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Microcap & Penny Stocks : FRANKLIN TELECOM (FTEL)
FTEL 0.670-3.5%Dec 24 12:55 PM EST
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To: Bill France who wrote (21028)11/11/1997 9:20:00 AM
From: Judith  Read Replies (6) of 41046
 
All, I was thinking about the FNET IPO and what it may do to the FTEL price and realized I didn't understand fundamentally why a company wants to IPO a part of itself. I am sorry if this is too basic of a question, but thought the experienced people here may be able to answer this.

Since FNET may be now, and is expected in the future to be profitable, why is it good to become a separate company? If the infusion of cash is the issue, why not just change he number of tradeable FTEL shares? I realize this dilutes the shares, but is it really different than all of a sudden having all the FNET shares, since FTEL will hold a large percentage of FNET?

Since IPOs are very popular, I must be missing the reason a company would choose to IPO part of itself. I would appreciate it if someone could educate me on the positive aspects of an IPO. Hopefully, that will help me understand the impact on the FTEL price.

Thanks,
Judith
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