Bill,
Maybe what we need is a definition of 'spinoff'. I use Wall Street Words by David L. Scott, School of Business Administration, Valdosta State Univ. He defines spinoff as, "Distribution to stockholders of the stock of a subsidiary held by a parent company. Normally the distribution is not taxable to the stockholders until the new shares have been sold."
As an illustration, he cites Amoco: "In 1985, Amoco distributed shares in one of its subsidiaries, Cyprus Minerals Company, to Amoco shareholders. As of June 19, the Amoco shareholders had received one share of Cyprus for every 10 shares of Amoco owned. The new Cyprus shares, which had traded in the over-the-counter market in the $12 to $13 range on July 1, approximately doubled in value within a year. Before the spinoff, Amoco stockholders had had no choice but to be owners of Cyprus because Cyprus was a 1979-acquired subsidiary of Amoco. Following the spinoff, however, Amoco owners could choose to remain stockholders in the minerals business or they could opt to sell their Cyprus shares. Amoco's stated objectives were to allow its management to concentrate on its core businesses in oil and gas and to divest itself of an investment with relatively poor earnings."
This sounds like a 'happy medium' that FTEL work out with the convertible preferred shareholders, ie, FNet will be something for them to hold onto even if there is no IPO by June 30. Lot of folks have been sitting on the fence, waiting to get in a good price. Seems to me like the last chance to buy FNet and FTEL at the same time is at hand. Think about it, separately they'll be worth a lot more than together.
BTW, how many DVGs do you see in today's press release? I see 100 before the year's out and that makes this FTEL's best year on record, as well as FNet's. Of course New York is going to need a lot more than two DVGs. DVG, no <GGGGGGGGGGG>
WH |
