Bob, as a shareholder of FTEL you already own a 79% stake in FNET. Whether shares of FNET are dispersed to shareholders, or kept within the company, the value will still reflected, one way or the other.
For instance, if FNET shares IPO'd for $10 you would either be given a share worth $10 or it would be retained by FTEL and the price would be reflected in FTEL stock price. As I explained earlier, normally the full valuation is not reflected (80%) is norm. But if you were given the stock in the form of a dividend, it then is taxable at whatever your tax rate is, say 35% so it's worth $6.50 vs $8.00.
There are of course variations to this and pros and cons to either one, but to answer your question, yes you do have ownership already in FNET, by owning FTEL shares. Somewhere, somehow that value will be reflected in your FTEL holdings.
The PP of FNET is at 1.00 per share, if in fact that IPO's at $10 you would realize a larger % gain, but you may be realizing more risk, plus the ill liquidity of the stock in the interim till IPO.
Hope this helps
rb |
