rudedog. Re: AV IPO. Would it be better for cpq and shareholders to follow a two phase process in spinning off AV?
Phase I: A modest percent of shares in IPO with cpq holding the majority.
Phase II: Say a year later when AV has a track record spin some shares off to current shareholders.
This, to me, has several advantages:
1) It limits the number of shares in IPO, which will give the price an an even greater upward tilt. Smaller supply will heighten demand.
2) By holding majority of shares, all long term shareholders benefit, not traders. Encourages institutions to buy and hold cpq to get the possibility of AV shares in the future (which you noted would be a plus).
3) Gives cpq more shares as "currency" to do deals which will increase AV's appeal to consumers and investors long term.
4) When cpq spins off some shares to shareholders say a year or so after the IPO, shareholders get a higher valued entity, in terms of price and a company with a clearer track record/roadmap for the future.
This IPO with a subsequent spin-off to shareholders was how Sears spun off Allstate, according to a friend. It may work with cpq too, since it could do the best job rewarding long-term holders.
HL |
