Leap Wireless International (LWIN) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Leap Wireless International (LWIN)

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Jon Koplik who wrote (49)	9/24/1998 10:55:00 AM
From: Robert J. Irvin	Read Replies (1) of 2737

If you are also an owner of Quallcom shares, you should not want Leap's stock to trade higher today. Page 36 of Leap's September 14 Information Statement states that "the fair market value of the Leap shares...will constitute a dividend taxable as ordinary income" and that "the fair market value of a Leap Share to a Holder for this purpose is expected to be the average of the high and low trading price on the date of the Distribution", which is today. Note, not the closing price today. Example: if the average of the high and low trading price today is $5, then an owner of 1,000 QCOM shares has a taxable dividend of $1,250, which cannot be offset against capital losses. If Leap's price then increases to $10, he has a $5 gain which can be offset against capital losses, for no current tax. At these prices, the discussion of Quallcom's accumulated "earnings and profits" for federal income tax purposes probably doesn't make any difference, since the total value of the Leap distribution at $5 would be under $100 million. I hope your investment does well, starting tomorrow. Good luck.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next