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Technology Stocks : Compaq
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To: Night Writer who wrote (45071)1/26/1999 12:03:00 AM
From: Night Writer  Read Replies (1) of 97611
 
If they spin off AV to the public, the share holders won't get the stock. It will go to the good buddies and mutual fund clients of the investment house / broker doing the IPO. True the money from the IPO will go into CPQ's treasury. However, the money would not represent the potential wild market value of an Internet company. The resulting impact on CPQ share value would amount to zip. The only people to benefit from this transaction would be the good ol' boys in the financial community. Who would love to handle this deal. Compaq would get great short term press from the community in return for Compaq lining their wallets. Hmmm, I sound like a radical politician on a soap box at this point. But wait, it gets better.

If Compaq management wants to spin AV off with the best interests of Compaq share holders at heart, they will grant the share holders one share of AV for about every 7 or 8 shares of Compaq shares. This would enable share holders to decide what to do with AV. Sell it or hold it. It would give share holders the opportunity to capitalize on the wild market valuations on Internet stocks. That is if the bubble doesn't break.

That is the reason I'm relatively upset by all the IPO spin off hype. It is nothing more then WS trying to push Compaq into a public IPO that does not have share holder interest at heart. It has their greedy interests at heart.
NW
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