"float" simply means the total amount of shares you can _buy_ from the
regular stock exchanges. Here is more news which pretty much echoes
what I said earlier this afternoon.
Reprint w/o permission... B-)
Intelligent Elec Seen Salvaging $7/Shr If Breakup Occurs
Dow Jones News Service ~ January 24, 1997 ~ 6:05 pm EST
By Anthony Palazzo
NEW YORK (Dow Jones)--If it disposes of its two major
divisions, Intelligent Electronics Inc. (INEL) may be able to
salvage about $7 a share in value, given Friday's closing
prices, said one market observer.
That's nearly double the stock's current value of 3 7/8, but
no windfall if investors bought the stock Thursday, when it
closed at 7 5/8.
Intelligent Electronics' stock plunged 49.2% Friday after its
publicly traded, 82%-owned unit, XLConnect Solutions Inc.
(XLCT), said its fourth-quarter earnings would be 2 cents to
4 cents a share, way below analysts' estimates of 9 cents.
XLConnect plunged 63%, or 14 7/8, to close at 8 3/4.
Intelligent followed it down because its ownership stake in
the unit is factored into its own stock price.
Late in the trading day, both stocks were halted until
Intelligent Electronics could announce it is evaluating the
possible sale or spinoff to shareholders of XLConnect, the
sale of other divisions or possible mergers or acquisitions.
James Meyer, an analyst at Janney Montgomery Scott Inc., said
Intelligent Electronics' computer reselling business, which
generates about $3 billion in revenue but has had trouble
generating profits, has an implied value in excess of $150
million, or about $4 a share.
Each Intelligent Electronics share also carries an implied
value of about $3 that can be attributed to XLConnect, Meyer
said, although that price fluctuates with the market.
Because Intelligent just spun off part of XLConnect in
October, the company might face a steep tax bill if it
decides to spin off the rest soon, Meyer said. Despite the
share-price drop, it would be better to wait a few months
until any transaction can be done tax-free, he said.
XLConnect, based in Exton, Pa., provides networking
consultation services.
If he were trying to dispose of the reseller business, Meyer
said, the first two calls he would make would be to
competitors Microage Inc. (MICA) of Tempe, Ariz., and Ingram
Micro Inc. (IM) of Santa Ana, Calif. InaCom Corp. (INAC)
ranks as another potential buyer, Meyer said.
''The industry has horrible margins in part because there are
too many players,'' Meyer said. ''Consolidation would be
useful.''
(END) DOW JONES NEWS 01-24-97
6:04 PM |
