NCR hatches brilliant plan to flush the hated small investor so they can spend more time with important folks, like analysts:
March 4, 1999
NCR Devises Stock-Buyback Plan
To Force Out Small Shareholders
By WILLIAM M. BULKELEY
Staff Reporter of THE WALL STREET JOURNAL
Most companies look for more shareholders. But NCR Corp. has hatched a unique plan to get rid of lots of them.
As a result of its spin-off from AT&T Corp., NCR pays big mailing and other costs to keep in touch with 600,000 stockholders who each own fewer than 10 shares. Buyouts aimed at the little people haven't bagged them all. So now, the Dayton, Ohio, computer and automated-teller machine maker has decided to force them out.
On Friday, May 14, after the New York Stock Exchange closes for the day, NCR plans a 1-for-10 reverse split, converting 10 shares that now sell for about $40 apiece into one share that should go for around $400. It will then declare all holdings of less than one share subject to repurchase for cash. A minute later it will declare a 10-for-1 split, which should return the shares not subject to repurchase to their previous value. Under securities regulations, holders of a share fraction can be cashed out even if they would rather hold on.
.
.
.
Mr. Malhotra says constant calls and letters from small shareholders keep him from talking to big investors and Wall Street analysts. In its two previous voluntary-buyback attempts, NCR charged holders $10 to sell their odd lots on the open market. In each case, about 300,000 holders sold.
|
