Safeguard Scientifics SFE Message Board

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Technology Stocks : Safeguard Scientifics SFE

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To: Disco Bull who wrote (2380)	3/18/1999 4:45:00 PM
From: still learning	Read Replies (2) of 4467

I think you may mean "DOCC" instead of DUCO. Re VERT, there were no rights offerings, since it was actually brought public by ICG, and not SFE. ICG is still private, so they buy stakes in other private companies, take some of them public, and SFE benefits through its 26% stake in ICG. It's a bit complicated, since SFE not only owns direct stakes in pre-IPO companies, but also owns pieces of other VC companies like ICG. When a true rights offering happens it's very simple. You get a prospectus in the mail from SFE and you have about 60 days to decide whether to buy the stock (typically at $5). Usually you get the oppty to buy 1 share of the IPO for every 5 shares of SFE you own. Your basis is the $5 you paid for the shares and you don't owe cap gains till you sell. When the stock goes public you own the shares you bought. If you decide not to buy, the SFE rights offering still has value -- you can sell it on the open market in the 60 day window period. Your basis is $0 and you owe cap gains on whatever you got for the rts offering (usually $5 and generally between $3 and $10 per right).

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